The Central Bank has accepted the entirety of the $ 58.6 million worth of bids received for the latest issuance of Sri Lanka Development Bonds (SLDBs).
The SLDB offer was for $ 30 million with a possible upsizing by another $ 80 million, making it a potentially $ 110 million issue. All tenors were at fixed rate determined through competitive bidding.
Most bids ($ 48.01 million) were for the short term nine-month SLDBs at a weighted average fixed rate of 7.69%. The one-year-eight-month tenor received bids worth $ 4.51 million at 7.67%, the five-year tenor received $ 4.96 million at 7.60%, while the two-year-nine-month tenor received $ 1.06 million bids at 7.98%.
From an initial amount perspective, the SLDB issue was oversubscribed unlike in the previous two offerings. However, at maximum potential value the latest issue remains unsubscribed.
The Central Bank said an issuance window for SLDBs would be opened with the announcement of the auction results until close of business on the day prior to settlement (i.e., preferably by 3:00 p.m. on 29.07.2021) at the Weighted Average Fixed Rates determined for respective maturities at the auction, up to the limit specified for possible upsizing, at a first-come-first-serve basis.
The previous SLDB issue was in June, aimed at raising $ 100 million. However, it only drew bids amounting to 35% of the issue. The highest bids, worth $ 29.20 million, were for the 10-month fixed rate of 7.40% of which CBSL accepted $ 28.58 million. The two-year-10-month SLDB offer saw $ 4.37 million worth of bids and CBSL accepting it in full at a fixed rate of 7.99%. The one-year-10-month and three-year-seven-month SLDBs drew bids worth $ 1.70 million (entirety accepted at 7.65%) and $ 0.26 million, respectively, of which $ 0.15 million was accepted at 7.68%.
Prior to that, the mega SLDB issue worth $ 750 million was in April, and it too went undersubscribed by 12%. Of the bids received, CBSL accepted those worth $ 652.6 million, and the balance was raised through direct issuance.
(FT)