Government officials connected to the bond are under US 'radio silence' rules. Financial market sources in Asia said orders were being taken for the bond.
Sri Lanka got a rating upgrade from Fitch and two outlook upgrades from Moody's and Standard & Poor's over the last three days saying the country could have low inflation and higher growth if government deficits are lowered as planned.
So far this year's deficit is "on track' to be around 7.0 percent of gross domestic product, Treasury secretary P B Jayasundera said earlier this month.
Fitch Ratings upgraded by one notch Sri Lanka's underlying rating to 'BB-' with the outlook now 'stable' at the higher level. Moody's raised the outlook on its 'B1' rating to 'positive'.
Standard & Poor's also raised its outlook on its B+/B rating to 'positive'.
In June, Sri Lanka appointed Bank of America Merrill Lynch, Barclays Capital, Hongkong and Shanghai Banking Corp, and Royal Bank of Scotland as joint lead managers for the bond sale.
Teams from Sri Lanka have fanned out to meet investors in a road show before the official launch of the bond in investor updates. An investor meeting is to be held in London later today.
"Sri Lanka is now familiar to bond buyers, some already have Sri Lankan bonds in their portfolios, they have been trading well," a source familiar with the deal told LBO Tuesday.
"Some of the faces are also familiar. So they have comfort in knowing what has happened in the meantime."
In 2010 a 10-year bond was sold for 6.25 percent.
Since 2007, Sri Lanka has sold two 500 million dollar bonds and one billion dollar bond.
Sri Lanka's rating upgrade and the bond launch comes amid turmoil in European sovereign debt and concerns over debt ceiling in the US. However a US bill auction was snapped up in the US with rates heading lower.
Yields on troubled European nations have topped 6.0 percent.
Analysts expect most of the demand for the Sri Lanka to come from the US, followed by Asia and Europe.
Correction - Sri Lanka sovereign bonds issues: two 500 million and one billion dollar tranche.