CB plans to raise up to US $ 750mn in SLDBs ahead of record maturities

• Public Debt Dept. publishes ‘Document of Offer’
• Bids would be accepted from today until April 28
• During last auction CB was able to raise US $ 49mn despite offering up to US $ 200mn
• SL has record SLDB maturities worth of US $ 1.1bn for the remainder of the year
• A US $ 694mn SLDB is scheduled to mature on May 1

The Central Bank (CB) plans to raise up to record US $ 750 million in Sri Lanka Development Bonds (Treasury Bonds denominated in US dollars) ahead of the US $ 694 million SLDB maturity scheduled for May 1, this year.

The CB’s Public Debt Department yesterday published the ‘Document of Offer’ to issue up to US $ 750 million of nine months, one year three months, two years, three years and three years nine months SLDBs, under a fixed rate determined through competitive bidding for all maturities.

The CB announced that it would be accepting bids for the issuance from 11:00 a.m. today (22nd) to up until 10:00 a.m. on April 28. The date of settlement is fixed for May 3.

In the last SLDB public auction held during January 15-19, this year, the CB was only able to raise around US $ 49 million, although it offered up to US $ 200 million. 

The investors in particular refrained from bidding on long-term SLDBs while limiting the focus on short-term SLDBs (one year two months) as seen in previous auctions held.
So far during the year, the CB has been able to raise US $ 83.83 million via SLDBs, at fixed interest rates ranging from 6.05-6.92 percent.

Sri Lanka has a record amount of SLDB maturities worth of US $ 1.1 billion for the rest of the year (excluding interest payments), including the US $ 693.89 million SLDB maturity scheduled for May 1.  

The SLDB maturities this year account for nearly half of the country’s current outstanding SLDBs.

The eligible investors to bid include foreign citizens and entities, non-resident Sri Lankans, Sri Lankan dual citizens, holders of personal foreign currency accounts and business foreign currency accounts, licensed specialised banks and licensed finance companies, which are permitted to accept deposits in foreign currency, authorised dealers in foreign exchange, primary dealers in government securities, specified companies that have entered into agreements with the Board of Investment of Sri Lanka and specified insurance companies licensed under the regulation of the Insurance Industry Act.

Meanwhile, the offer document said due to applicable regulatory requirements in the US, this offer is not extended to the US or to US persons. 

“The Sri Lanka Development Bonds shall not be offered, sold, resold, pledged, transferred, assigned or delivered to or within the USA or to US persons,” it noted.