Sri Lanka appoints four foreign banks to manage bond issue

June 23, 2011 (LBO) - Sri Lanka's Central Bank has appointed Bank of America Merrill Lynch, Barclays Capital, Hongkong and Shanghai Banking Corp, and Royal Bank of Scotland as joint lead managers to advise and handle a future international sovereign bond issue. "There is no doubt in anyone’s mind about Sri Lanka’s performance so we do not foresee any anxiety. So it will be a fairly well received credit."

Updated The appointments were made after evaluating proposals received from seven top international banks and investment houses, a statement said.

The central bank has said it intends to sell a billion US dollar sovereign bond this year with the money to be used to help pay off debt and build infrastructure.

Central bank governor Nivard Cabraal said the bond's tenure was likely to be 10 years.

"We don’t want to go longer because then the situation will get tighter and tighter," he told LBO Wednesday.

"We don’t want to lock ourselves to a current credit number for a longer period. Interest rates - we cannot say for sure because it will depend on the world market conditions.
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We would certainly expect the rate to be lower than last year."

Cabraal said he expects the bond to be well received given the island's accelerating economic growth after the end of its 30-year ethnic war.