The issue of Sri Lanka Development Bonds (SLDBs) for US$ 50 million has been oversubscribed by 4.8 times with total bid received amounting to US$ 239.5 million the Central Bank said on Monday.
The Central Bank on behalf of the government has offered to issue of US$ 60 million in 3-year tenor to eligible investors for subscription at a rate of US$ 6 month LIBOR plus a margin to be determined through competitive bidding.
Both foreign and local commercial banks have subscribed bids at the auction that was opened from June 16 - 23 for bidding. The bonds have a settlement date on June 30.
Considering the high demand from the investors at a highly competitive margin for SLDBs and providing an opportunity for investors to invest their funds for a longer period, the government has decided to accept the entire US$ 239.5 million in 3 year maturity at the market determined rates of US Dollar 6 month LIBOR + 375 bps (weighted average margin, the Bank said in a statement.
According to the Central Bank, six-month LIBOR on Friday, June 23, 2014 was at 0.3234percent.
The SLDBs are transferable by endorsement, delivery and registration with the Superintendent of Public Debt of the Central Bank of Sri Lanka. Eligible investors may purchase SLDBs in the secondary market through Designated Agents appointed by the Central Bank of Sri Lanka.