Sri Lanka repays US$ 1 Billion Bond
Source:Dailynews
Sri Lanka has transferred funds to repay a $1 billion bond by the Tuesday deadline, keeping intact its reputation for honoring debt as concern mounts about the nation’s overseas financing.
The money was transferred Monday, Ajith Nivard Cabraal, the State Minister for Money and Capital Markets, said by phone.
Moody’s Investors Service placed Sri Lanka’s ratings under review for a downgrade last week, citing its assessment of the country’s increasingly fragile external liquidity position and the risk of default.
“I have been saying right throughout that we will pay. Unfortunately some bondholders panicked due to rating actions and analyst reports and sold off at huge discounts,” Cabraal said in a separate interview Sunday. “Those who came last profited most.”
The yield on the 6.25% Sri Lanka dollar bond maturing Tuesday slumped to 500% earlier on Monday,from 628% last week. The yield on the 5.75% 2022 dollar bond rose by 34 basis points to 21.62%, and that on the 6.85% 2024 note fell by 2 basis points to 26.26%.
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The payment marks the clearing of only the first test. Two more payments,a US$ 500 million bond and US$ 1 billion of debt – become due next year, with Colombo saying arrangements have been made for the transactions.(Bloomberg)
