27 July 2011 10:49 pm Views - 5438
Sri Lanka yesterday obtained US$ one billion (Rs.101 billion) through an International Bond Issue (IBI) repayable in 10 years at an annual rate of 6.2 per cent interest, Central Bank Governor Ajith Nivard Cabraal said.
He told Daily Mirror that the funds would be partly used to pay loans obtained earlier at higher rates of interest and partly for development purposes.
“The IBI was opened on the 20th and it was oversubscribed within a couple of days, displaying the level of confidence the global business community has on Sri Lanka,” Mr. Cabraal said.
The 315 subscribers were drawn from the United States, European Union and Asia. The one billion He said the US dollars raised subscriber allocations to 47 per cent from the US, 30 per cent from EU and 23 per cent from Asia.
“Several successful road shows were held by the Central Bank in Singapore, Hong Kong, Los Angeles, St. Francisco, Boston, New York and London prior to the IBI,” Mr. Cabraal said and added that the loans obtained earlier at higher interest rates had become cumbersome for the economy and the government and as such had decided to pay them off as early as possible through foreign currency funds raised at lower interest rates.
The enthusiasm shown by the international community to subscribe to the IBI by Sri Lanka has indicated interest shown by the global business community to participate in the post war development programme of Sri Lanka, he added.
Meanwhile, Browns Group Deputy Chairman Ajith Devendra said the oversubscribing of the Sri Lanka’s IBI is an indication that the country’s economy was on the right track.
“Even major European countries and even the US were finding it extremely difficult to raise IBIs and obtain outright loans. Sri Lanka’s feat in raising US$ one billion through an oversubscribed bond issue is praiseworthy and shows the investor confidence on the country,” Mr. Devendra emphasized.
He said the newest IBI and oversubscription will create a new bench mark for Sri Lanka’s economy and will promote confidence among the international business and financial community.