Sri Lanka raised another US$250 million long term international bond through National Savings Bank (NSB) to finance counterpart funds required for infrastructure projects and other projects as well as to maintain cash flows and general corporate purposes as the earlier $750 million raised by the bank is almost exhausted, official sources said. The Central Bank [...]

The Sundaytimes Sri Lanka

Sri Lanka raises another US$250 mln through NSB

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Sri Lanka raised another US$250 million long term international bond through National Savings Bank (NSB) to finance counterpart funds required for infrastructure projects and other projects as well as to maintain cash flows and general corporate purposes as the earlier $750 million raised by the bank is almost exhausted, official sources said.

The Central Bank will absorb the proceeds of National Savings Bank’s (NSB) $250-million bond sale following a directive of the Finance Ministry to fund various development projects when the need for such financing arises, a senior official of the countrys banking regulator said. Other government sources said part of this money is likely to be channelled to some ‘political’ projects.

The NSB raised $750 million last year and of this money it was expected to utilize $500 million for the first phase of the Weeras Ganga Development Project implemented by the Urban Development Authority (UDA), and the construction of the $202 million Werahera Teaching Hospital of the General Sir John Kotelawala Defence University. The construction work of the hospital is now underway and the first phase of the Weeras Ganga Development Project has been completed.

An NSB spokesperson told the Business Times that the $250 million bond was raised in accordance with a Finance Ministry directive and it was a requirement of the bank.

NSB has so far raised $1 billion in international bonds and former chairman Sunil Sirisena, a reputed administrative officer, had to quit for failing to heed a directive by Treasury Secretary Dr. P.B. Jayasundera to expedite this international bond issuing process in June 2013.

The latest bond issue received orders worth over $2 billion underlining the strength of demand for NSB and strong investor interest in Sri Lanka. The coupon of 5.15 per cent represented the lowest coupon by a Sri Lanka institution in the international debt capital markets. Citi acted as Joint Bookrunner and Joint Lead Manager for this transaction that represented the lowest yield outside of the sovereign itself, Citi Bank revealed in a media release.

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