Will use Int’l Bond Issue to repay loans

Will use Int’l Bond Issue to repay loans

Central Bank Governor Ajith Nivard Cabraal said yesterday that the US$ one billion (Rs.101 billion) obtained recently through an International Bond Issue (IBI) would be used partly to repay loans obtained earlier at higher interest rates and partly for development purposes.

Mr. Cabraal said that the loans obtained earlier at higher interest rates had become cumbersome for the economy and the government and, therefore, the government had decided to pay them off as soon as possible through foreign currency funds raised at lower interest rates.

The recent Bonds are repayable in 10 years at an annual interest rate of 6.2 per cent.

“The Bond issue was opened on the 20th and it was oversubscribed within a couple of days, displaying the level of confidence the global business community has in Sri Lanka,” said Mr. Cabraal.Contd. from A1

The 315 subscribers were drawn from the United States, the European Union and Asia. He said the latest bond issue comprised subscriber allocations of 47 per cent from the US, 30 per cent from the EU and 23 per cent from Asia.

“Several successful road shows were held by the Central Bank in Singapore, Hong Kong, Los Angeles, San Francisco, Boston, New York and London prior to the IBI,” said Mr. Cabraal

The enthusiasm shown by the international community to subscribe to the IBI by Sri Lanka has indicated the interest shown by the global business community to participate in the post war development programmes of Sri Lanka, he added.

Meanwhile, Browns Group deputy chairman Ajith Devendra said the oversubscription of Sri Lanka’s IBI was an indication that the country’s economy was on the right track.

“Even major European countries and 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 investor confidence in the country,” said Mr. Devendra.

He said the newest IBI and its oversubscription would create a new benchmark for Sri Lanka’s economy and promote confidence within the international business and financial communities.


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