Apr 30, 2020

Sri Lanka Development Bonds undersubscribed, US$26mn sold Featured

An auction of dollar denominated Sri Lanka Development Bonds had been undersubscribed with 26 million dollars of securities sold after offering 63 million dollars, data from the state debt office showed.

In six month securities 0.50 million US dollars of were sold at 5.79 percent, taking all bids.

In 1 year, 3 month Sri Lanka Development Bonds, 15 million dollars were sold at 6.83 percent taking all bids.

In 30 year SLDBs 1.20 million dollars were sold at 6.70 percent taking in all bidsIn 4-year 9-month SLDBs 1.30 million dollars were sold at 6.75 percent, taking all bids.

There were no bids for calls for floating rate bonds of the same tenors.

Several recent Sri Lanka Development Bond auctions have been undersubscribed.

In recent weeks dollar liquidity tightened in Sri Lanka’s credit system amid rupee liquidity injections are rate cuts (printing money).

As money printing put pressure on a currency peg triggering rating watches and a downgrades foreign lenders are also demanding higher yields.