27th September 2010, www.lankabusinessonline.com
Sri Lanka has opened subscriptions for a billion US dollar 10-year sovereign bond which may sell for around 6.5 percent days after the International Monetary Fund gave 212 million US dollars to the Central Bank to beef up already high reserves.
A Bloomberg newswires report said the bond may yield around 6.5 percent.
A source familiar with the sale said there is strong interest for the bond, which is expected to be "comfortably oversubscribed", with bids collected as global markets open westwards.
Sri Lanka has been on a road show arranged by the Bank of America, HSBC Holdings and Royal Bank of Scotland group which is assisted by state-run Bank of Ceylon to sell the bond.
Fitch Ratings Monday gave a 'B+' rating with a 'positive' outlook for the bond. Fitch lifted the outlook on Sri Lanka's sovereign credit rating from 'stable' to 'positive' ahead of the bond sale and Standard & Poors' upgraded its rating to 'B+' from 'B'.
Moody's issued a 'B1' rating for the first time.
Agencies said the ratings could improve if the government improves is budgeting and the central bank keeps inflation low and the economy stable.
Sri Lanka's statistics office estimated economic growth at 8.5 percent for the second quarter and stocks are up over 100 percent so far this year.
Sri Lanka Road Show to Sell $1bn Sovereign Bond Late September
Moody's Gives Sri Lanka B1 Sovereign Rating with a Stable Outlook