Sri Lanka sells 5-year, US$500m sovereign bond at 5.125% yield

COLOMBO, April 8 (Reuters) - Sri Lanka sold a US$500 million (S$630 million), five-year sovereign bond at a yield of 5.125 per cent, the island nation's central bank said on Tuesday.

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

The Indian Ocean island nation's 2014 budget approved a US$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 per cent after a 5.5 per cent 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 per cent, 7.40 per cent and 6.00 per cent respectively.

Follow ST on LinkedIn and stay updated on the latest career news, insights and more.