By Saikat Chatterjee | Bloomberg
.............................................................................................................................................................................................
The bonds may be sold “around September,” the Central Bank of Sri Lanka said in an e-mailed statement today. The monetary authority has invited proposals from investment banks to manage the sale.
Sri Lanka plans to raise debt to rebuild the nation’s economy ravaged by a 26-year civil war that ended in May 2009 and retire high-cost borrowings after sovereign rating companies revised the island nation’s credit outlook. Sri Lanka on June 29 unveiled plans to slash its budget deficit by the most in eight years and pledged to cut taxes to spur economic growth.
Sri Lanka’s sovereign rating may be raised as funds from a $2.5 billion International Monetary Fund loan improved the “external liquidity situation,” Standard & Poor’s said last month. The South Asian country turned to the IMF last year after foreign-exchange reserves dropped to an eight-year low.
Positive Outlook
Standard & Poor’s in October raised its outlook on Sri Lanka’s credit rating to positive from stable. The nation has a long-term foreign currency debt rating of B, five levels below investment grade and on a par with Kenya and Paraguay.
“The positive outlook means that the most likely outcome, in the next move, is for the rating going up,” Agost Benard, S&P’s Singapore-based associate director, said on July 1.
The central bank on June 10 raised its 2010 growth forecast to 7 percent from an April estimate of 6.5 percent, saying all sectors of the economy had shown “substantial” growth.
Sri Lanka also had its outlook revised to stable from negative on Oct. 9 by Fitch Ratings. The credit assessor affirmed the country’s rating at B+, its fourth-highest non- investment grade.
The nation’s last global bond sale in October attracted bids for more than 13 times the $500 million offered. The 7.4 percent notes due in January 2015 were sold to yield 5.06 percentage points more than similar maturity U.S. Treasuries. Its debut offering in October 2007 saw $500 million of debt due October 2012 sold at a spread of 3.97 percentage points.
© Bloomberg
No comments:
Post a Comment