Sri Lanka receives $1.8 billion of bids after seeking $500 million loan

Sri Lanka has received $1.8 billion of bids for a proposed $500 million loan via a foreign currency term financing facility, two finance ministry officials knowledgeable about developments told Reuters on Tuesday. "We have got $1.8 billion worth bids and officials are negotiating keep the total net cost below 3.25 percent," one of the officials said.
The second official said reputable international banks were among the bidders and there was overwhelming response for the loan, which is to meet the costs of some externally-funded projects stated in its 2015 budget. The ministry of economic affairs has said the loan is likely to be at a fixed or floating rate "linked to US dollar six-month LIBOR with a maturity period not less than three years".
Finance Minister Ravi Karunanayake has said the borrowing of the new government, which came to power after a January 8 election, has been on the rise because it is compelled to pay heavy debts left by the previous administration, mainly for infrastructure projects. The new administration has slowed many infrastructure projects mainly financed by China amid allegations of corruption and over-estimation of costs by the administration headed by Mahinda Rajapaksa. He has rejected the allegations.