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US$ 1bn sovereign bond: Order books open
Wednesday, 18 July 2012 - 10:04 AM SL Time
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Currency dealers said order books for the US$ 1 billion sovereign bond issue opened yesterday as officials went into radio silence in keeping with US laws governing such issues in order to give all prospective investors a level playing field.
Sources said the initial price guidance for the issue ranged from 5.875 percent to 6.125 percent.
One dealer said there was great demand for the bonds.
`The rates are pretty attractive given the global economic climate,` another dealer said.
The government is planning to use US$ 500 million to rollover an earlier bond issue.
The peace dividend and prospects for high growth are positive factors for investors seeking to invest in the bonds, ratings agencies said on Tuesday.
With the sovereign bond issue expected to be successful, currency dealers said exporters are now beginning to convert their dollar holdings.
`We are not seeing exporters bring in dollars by the bucketful, but we are now seeing more conversions taking place. The sovereign bond issue will strengthen the rupee and this is prompting exporters to rethink their positions,` a currency dealer said.
The rupee closed flat yesterday (17) against the dollar as importer demand and dollar inflows cancelled each other out.
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