April 8, 2014 / 3:35 AM / 4 years ago

Sri Lanka sells 5-yr, $500 mln sovereign bond at 5.125 pct yield

COLOMBO, April 8 (Reuters) - Sri Lanka sold a $500 million, five-year sovereign bond at a yield of 5.125 percent, the island nation’s central bank said on Tuesday.

It was the second eurobond the $67 billion economy sold this year. In January, it sold $1 billion, five-year sovereign bond at a yield of 6 percent.

The Indian Ocean island nation’s 2014 budget approved a $1.5 billion overseas borrowing to finance some infrastructure projects.

The latest bond issue, the seventh by Sri Lanka since the first eurobond in 2007, was priced at a yield of 5.125 percent after a 5.5 percent initial price guidance.

“This tighter yield reflects the continued confidence that international investors have placed in the sovereign bond issuance of Sri Lanka,” the central bank said in a statement.

Citigroup, HSBC, and Standard Chartered Bank were the joint lead managers and bookrunners for the bond issue, which was oversubscribed by 8.3 times.

Sri Lanka’s previous five-year issuances in 2007, 2009 and January 2014 were priced at yields of 8.25 percent, 7.40 percent and 6.00 percent respectively. (Reporting by Shihar Aneez and Ranga Sirilal; Editing by Anupama Dwivedi)

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