Monday 24 August 2015

Sri Lanka to auction Rs40bn in 5 to 10 year bonds

ECONOMYNEXT - Sri Lanka has called offers to sell 40 billion rupees of 5, 6, 8 and 10 year bonds ahead of a bond maturity with yields moving up slightly over the past week.

The debt office is offering 4.0 billion rupees of 5-year bonds maturing on 01.05.2020, which is not liquid in the secondary market, dealers said.

Bonds maturing on 01.07.2019 were quoted around 8.18/28 percent Friday, up from 8.20 levels on August 18.

Ten billion rupees of 8-year bonds maturing on 01.09.2023 is also offered. Similar bonds were quoted around 9.45/50 percent.

The debt office is also offering 12.5 billion rupees of 10-year bonds maturing on 01.08.2025 and 15-yaer bonds maturing on 15.05.2030.

Ten year bonds were quoted around 9.65/70 percent on Friday, up from 9.45 percent on August 18.

Indicative quotes for the 15-year bond ranged around 10.05/25 percent.

The auction which closes on August 25, has a settlement date of September 01.

There is a 79.5 billion rupees bond maturity of September 01 and yields tend to spike ahead of suc roll-overs encouraging more investors to buy and also for dealers to bid with leveraged funds and sell-them down later.

However in the short end, the Central Bank has started buying up large volumes of Treasury bills to print money and resist an increase in interest rates, which analysts warn is generating pressure on the balance of payments as well as foreign reserve losses.

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