The Central Bank may increase the size of a planned sovereign bond issue to $500 million from $400 million if there is sufficient demand, the Governor said on Thursday. If successful, the Central Bank could be tempted to look at issuing a further tranche, Governor Ajith Nivard Cabraal told Reuters in a telephone interview.
"We don't want to stretch ourselves any more than we need to," he said. "This, we think, is comfortable as far as our own set of projects in hand (goes), but if we find that (the uptake) is very good, we might be tempted to look at something."
The bond, which Sri Lanka hopes to issue by mid October, would be the island's biggest dollar bond issue. It would be snapped up if it was priced to yield 8 percent, said ING economist Tim Condon.
"At the right price the appetite would be voracious. This is a new name and people are hungry for diversity," Condon said.
The central bank had received 11 bids from 14 banks to act as lead manager, the central bank chief said.
They had been asked to bid for both a $400 million bond offer and a $500 million offer, he said.
The bond's proceeds would be for infrastructure projects, said Deputy Governor W.A. Wijewardena.
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