The dollar bond issue will be offered to the market next week, with subscription closing on August 18, Central Bank's deputy director of public debt, Ranjani Weerasinghe told LBO Friday.
She said the 3-year bond will be offered on similar terms as an earlier Sri Lanka Bond issue in June.
Treasury Secretary P B Jayasundara told businessmen late Thursday that the government was also planning to borrow on commercial terms to build the Colombo - Katunayake expressway.
During the last two years the government has started tapping the dollar assets of the commercial banks heavily to bridge the budget deficit, to avoid pushing domestic rupee rates up.
In June, the government raised 300 million dollars through 2 and 3-year dollar bonds, at around 130 basis points above 6-months London Interbank offered rate (LIBOR) partly to repay maturing debt raised at 1.
85 basis points above LIBOR.
Six months LIBOR is now trading at 5.
54 percent.
The government first announced that only 200 million dollars would be raised, but later accepted bids for 300 million dollars.
Dealers are expecting the government to accept extra bids up to a value of 50 to 100 million dollars if the rates are attractive.
A 50 million dollar development bond issued in 2004 at 1.
79 percent above LIBOR is due to mature on August 18.