SL secures US $ 1bn term loan from China Development Bank

The Central Bank yesterday said Sri Lanka secured a US $ 1 billion foreign currency term financing facility from China Development Bank (CDB), at highly competitive interest rates.

The bank said the interest cost is highly competitive and linked to a six-month US dollar LIBOR with a grace period of three years.
The repayment will be in equal semi-annual payments after the grace period.

The Central Bank said the resulting inflow would increase the official foreign reserves by US $ 1 billion.

The Central Bank said CDB was selected as the syndicate arranger based on the least cost and longer maturity period given in its proposal submitted.

Four proposals were received from international and domestic banks and investment houses in response to the government’s invitation to submit proposals for a foreign currency term financing facility denominated in US dollar or Japanese yen or euro or of their combination up to a limit of US $ 1 billion. 

The Central Bank said the proposals were subjected to strict evaluation and negotiation process by a Cabinet-appointed Steering Committee and Technical Evaluation Committee.

The Central Bank recently said it is also planning to raise US $ 500 billion through Samurai and Panda bonds and a further US $ 1 billion through an international sovereign bond issue before end of this year.