"We are in the process of talking to commercial banks on how to structure the issue and get the best deal for us," he said.
Hemachandra said the government would not use the country's newly acquired sovereign rating as a tool to market the sale.
"US$ 100 million issue will test market appetite, we will issue more depending on the government's needs," he said.
Last December, two international rating agencies - Fitch Ratings and Standard & Poor's - assigned speculative ratings to the country. Fitch gave the nation a BB- rating while Standard & Poor's awarded it a lower B+ sovereign rating.
Citibank N.A. last month helped Sri Lanka raise US$ 100 million through a syndicated loan, which was priced at 95 basis points above the London Interbank Offered Rate or LIBOR.
Bankers close to the issue said the Citibank's deal was the best on offer so far.
Treasury Secretary P B Jayasundara is keen to issue lower denominations to encourage overseas resident Sri Lankans to subscribe.
Opinion is divided, but bankers have suggested the government opt for a straight syndicated loan as opposed to a small-denomination issue, which will increase costs.
Nearly a million Sri Lankans who live and work overseas, remitted around US$ 1.7 billion to the island last year, according to Central Bank data.
Sri Lankan President Mahinda Rajapakse, who also wears the cap as finance minister, said during his budget speech in December that the island would sell between three to five-year bonds, to ease reliance on domestic loans and foreign aid.
The country, Rajapakse said, would use the money to rebuild infrastructure that was destroyed during three-decades of civil war and the December 2004 tsunami, as well as to fund welfare commitments made during his election campaign.
However, analysts say Sri Lanka has enough lenders who are prepared to finance reconstruction and long-term projects at very low rates or through outright grants and any commercial loan are needed only to plug holes in current spending, which is made up largely of subsidies for fuel, fertiliser and other populist handouts.
- Mel Gunasekera: mel@vanguardlk.com