SL raises US$2b through int’l bonds: Ravi

Published : 12:10 pm  May 30, 2015 | No comments so far |  | 

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By Sandun A Jayasekera
Sri Lanka has raised nearly US$2 billion through the issue of International Sovereign Bonds (ISB) and Sri Lanka Development Bonds (SLDB) and a credit facility from several foreign commercial banks, Finance Minister Ravi Karunanayaka said yesterday.

Contrary to opposition’s claim that Sri Lanka’s economy was in the doldrums and the foreign financial agencies had lost confidence in the Maithripala Sirisena government, the minister said this bond issue and the credit facility was the best example of the level of confidence in the government.

 


"The bond issue and credit facility will raise our foreign reserves to nearly US$10 billion from the current US$7.2 billion and keep the rupee stable.  The most important factor in this bond issue and the credit facility is that none of them are unsolicited offers but through open tenders done in an extremely transparent manner"


 

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He said US$988 million has been raised through the issue of International Sovereign Bonds (ISB) and US$650 million through the issue of Sri Lanka Development Bonds (SLDB) at the comparatively low interest rate of  5.26%.  The minister said an additional US$500 million has been raised from foreign commercial banks such as JP Morgan, Barclays, PMB International, Union Bank of Switzerland and a leading Middle Eastern Bank. He said Sri Lanka had the capacity to increase foreign reserves by another US$2 or 3 billion.


He said the Central Bank successfully launched and priced a US$650 million 10-year International Sovereign Bond at an annual yield of 6.125 per cent and successfully issued US$329 million Sri Lanka Development Bonds (SLDB) of 1-year 1-month maturity at a Weighted Average Margin (WAM) of 316.69 and US$9 million SLDBs of 2-years 11-months maturity on a six-month London Inter-bank Offered Rate (LIBOR).


“The bond issue and credit facility will raise our foreign reserves to nearly US$10 billion from the current US$7.2 billion and keep the rupee stable.  The most important factor in this bond issue and the credit facility is that none of them are unsolicited offers but through open tenders done in an extremely transparent manner. We are extremely satisfied that the interest rates we have to pay is the lowest in recent times as opposed to nearly 7 or 9 per cent paid by the Mahinda Rajapaksa government for  their foreign borrowings,” the minister said. The G.L. Peiris, Bandula Gunawardana and Sarath Silva clique is working overtime to sabotage the government’s efforts to obtain foreign loans at lower interest rates. They were able to scuttle the government’s attempt to raise Rs.400 billion but they have failed in their effort to prevent global financial agencies assisting Sri Lanka.”


On the Central Bank bond scandal, he said he and the government was protecting Governor Arjuna Mahendran because he had done nothing wrong and the Supreme Court had absolved him of any wrong doing.  The minister said the opposition had the opportunity to respond based on the COPE sub-committee findings on the sale of bonds.


On the opposition’s two no-confidence motions to be moved in parliament against Prime Minister and himself, the minister challenged the opposition to move the two motions and pass it in parliament if possible.


He said that neither the government nor himself were afraid of the opposition’s so-called no confidence motions.
Central Bank Governor Arjuna Mahendran assisted the minister at the news n briefing.

 

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