Sri Lanka Treasury issues bonds to support state enterprises

Jan 01, 2016 (LBO) - Sri Lanka's treasury has issued 50 billion rupees in bonds to repay outstanding loans or raise capital of state-owned enterprises, a Central Bank official said, explaining the likely scenario for an increase in bonds outstanding this month. Data shows a bond maturing 15 December 2020, for 50 billion rupees, placed outside of Central Bank auctions. "The treasury occasionally issues bonds to some institutions in lieu of cash. But those are restricted to only state-owned enterprises. I am not aware of any private placements, that has not happened," Central Bank Governor Arjuna Mahendran said, speaking to media on Thursday. According to the 2015 budget, there was a proposal for state-owned enterprises to receive 117 billion rupees to repay outstanding debts or raise capital, Nandalal Weerasinghe, the deputy governor of the Central Bank said. "This may be one of those instances. It is basically the government providing capital to state-owned enterprises." Central Bank officials said the Bank of Ceylon was the likely recipient of these bonds for payments owed to the state bank. The Finance Ministry is yet to issue a statement on these bonds.