Lanka aims better credit rating

21 May 2011 12:40 pm Views - 6357

Sri Lanka is hoping for a better credit rating to boost its plans to sell a $1 billion sovereign bond this year, an official said Saturday, ahead of a visit by ratings agencies.

The Central Bank's deputy governor Dharma Dheerasinghe said the agencies, Standard and Poor's and Fitch and Moody's will begin a visit to the island next Monday to assess the its financial health.

"We have a better credit story to tell now" Dheerasinghe told AFP, comparing his country's economic fortunes to those during the decades-long ethnic conflict with Tamil Tiger rebels which ended in May 2009,

"The economy is growing steadily," he said. "We hope there will be an improvement in our rating after the review."

The island's $50-billion economy is tipped to grow at a record 8.5 percent this year, up from a 32-year high of 8.0 percent posted in 2010.

The bank has set its sights on Sri Lanka achieving a rating of at least "BBB" -- just one notch below investment grade -- by 2014 to allow it to borrow at cheaper interest rates on the international market.

Sri Lanka currently has a "B" grade -- five notches below investment grade -- from global ratings agency Standard and Poor's.

The central bank governor said the planned bond will carry a tenure of 10 years or more. He added roadshows have been lined up in June in London, Singapore and New York.

The bond, which will help pay off debt and raise cash for infrastructure investments, is expected to be issued in July but no firm date has been set.

It will be Sri Lanka's fourth international bond offering, known as a eurobond, since it first tapped foreign capital markets in 2007.

The island has also raised money through short-term loans and syndicated loans to meet its budgetary needs. (AFP)