Govt. issues USD 50mn Dollar Bonds to local banks — First since 2022
Sri Lanka has issued a USD 50 million Domestic Dollar Bond (DDB), marking the first such move since the country declared bankruptcy in 2022. The bond is aimed exclusively at raising foreign currency from locally incorporated commercial banks.
According to the Treasury, the bonds carry a maturity period of one to three years, while the interest rate will be set through competitive bidding. Subscriptions will be accepted from December 3 to 10, with only licensed commercial banks eligible to participate.
Interest on the USD-denominated bonds will be paid semi-annually or annually, subject to local tax regulations.
The Treasury announced the bond issuance on Friday after securing approval from the Central Bank under the Foreign Exchange Act, No. 12 of 2017. The serially numbered bonds will be available in minimum investments of USD 1 million, increasing in multiples of USD 100,000. Participating banks must remit payments to the Central Bank’s account at the Federal Reserve Bank in New York.
The notice was issued by the Finance Ministry’s newly established Public Debt Management Office, following a Cabinet decision on October 13 based on a proposal submitted by President Anura Kumara Dissanayake.
The Cabinet paper noted that improved foreign exchange inflows and stronger liquidity in the domestic forex market have created space for a dollar-denominated domestic borrowing tool, offering a new investment avenue for local banks.
A market survey conducted by the Central Bank’s Public Debt Department in August also indicated strong investor appetite, with interest expressed for investments up to USD 100 million for tenures ranging from under one year to three years.
Source – sundaytimes.lk
