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  • Sri Lanka to sell billion-dollar bond in September

    Published on August 5, 2010

    Sri Lanka on Wednesday said it would issue a billion-dollar sovereign bond in September to help rebuild infrastructure after the end of a nearly four-decade civil war with Tamil separatists last year.

    The move comes just over a year after the government was forced to go to the International Monetary Fund (IMF) for a bailout after its reserves almost evaporated as Colombo sought to put an end to the conflict.

    “We feel there is appetite out there for our long-term securities, especially as the economy is recovering nicely after the war,” the Central Bank of Sri Lanka Governor Nivard Cabraal said.

    The island’s USD 40 billion economy is tipped to grow seven per cent this year, up from 3.5 per cent in 2009, after government troops ended the conflict with Tamil Tiger guerrillas last May.

    “Our reserves are climbing and investor sentiment is quite bullish,” he added.

    The central bank governor said it was looking at a longer maturity for the bond, without elaborating, and added it would be launched in September.

    The governor said the money raised would be used for construction projects in the war-hit northeast as well as for other purposes.

    The bank said it would pick a banker this week to act as lead manager to the sale.

    Seven foreign lenders and investment banks have shown interest in managing the sale, the bank’s public debt office said.