“We may sell a sovereign bond in 2012. We are looking longer tenure of at least 10 years and a size of between $500 million to $1 billion,” he told Reuters, after a tour of Mannar. “The amount will be decided according to the requirement of that time.”

Sri Lanka has already sold three Eurobonds since 2007 and the last one, a $1 billion, 10-year bond was sold in September to yield 6.25 percent. Sri Lanka’s debut $500 million Eurobond issued in 2007 with a coupon of 8.25 percent is now trading to yield around 3.2 percent to 3.7 percent.
Its second bond sold last year with a coupon of 7.4 percent, now yields 4.4 percent to 4.6 percent, Reuters data showed.

“Our spreads are getting tighter now. So we can raise money at a cheaper rate than the debut bond.

We can manage the repayment of the debut bond in 2012 without much pressure,” he said.

The governor said the country had no funding needs for 2011, so had not decided whether to issue an international bond that year or not.

The economy, which is expected to expand by near 8 percent this year from an eight-year low of 3.5 percent in 2009, is expected to expand robustly in 2011 as well.

“Eight percent should definitely be something that we should estimate,” he said when asked about the economic growth in 2011, which the central bank will officially announce on Jan. 4.