Sri Lanka Development Bonds completed under DDO programme – State Minister

The Government has announced that Sri Lanka Development Bonds (SLDBs) have been completed under the Domestic Debt Optimisation (DDO) Programme, State Minister of Finance Shehan Semasinghe stated.

In a post on X (formerly Twitter), he further stated that the acceptance of offers to the invitation to exchange Treasury bonds for new bonds as per the “Treasury Bond Exchange Memorandum”, dated 04 July, which are in line with the DDO, was also approved by the parliament.

As of 28 June 2023, the outstanding principal amount of eligible bonds stands at a total of Rs. 8,716 billion, while the outstanding principal amount of eligible  bonds for which valid offers were both submitted and accepted amounted to Rs. 3,208 billion and Rs. 3,204 billion, respectively.

“From the outstanding principal amount of eligible bonds as at 28/06/23, accepted valid offers of eligible bonds amounts to 37%. The outstanding principal amount of eligible bonds held by superannuation funds for which valid offers have been accepted is 84%”, the State Minister said.

Further explaining the acceptance of offers to the invitation to exchange Treasury bonds for new bonds, Semasinghe explained that the success made in this regard will enable the government to reduce Gross Financing Needs (GFN), thereby achieving the GFN target as outlined in the Extended Fund Facility (EFF) programme by the International Monetary Fund (IMF). 

Moreover, the State Minister said that the bonds which matured on 01 September were excluded from the DDO process, and were paid in full due to the extension of the Invitation to exchange.

Accordingly, 14 September has been determined as the settlement date for the invitation to exchange, while new bonds will also be issued to eligible holders on the said date, in accordance with the accepted offer.