Sri Lanka raised Rs. 2.282 billion during the second subscription phase of its latest Treasury bill auction, approximately 68% less than the amount raised through the corresponding phase a week earlier.
The Public Debt Management Office announced the final results on October 22, confirming that the government accepted a total of Rs. 82.893 billion from the October 21 issuance.
The primary auction had raised Rs. 80.611 billion.
A further Rs. 2.282 billion was accepted through the second subscription phase, which closed on October 22.
The final amount represents approximately 82.9% of the Rs. 100 billion originally offered.
Second-phase borrowing declines from previous week
At the October 14 Treasury bill auction, the government raised Rs. 7.206 billion through the second subscription phase.
The corresponding amount for October 21 was Rs. 2.282 billion.
The difference is Rs. 4.924 billion.
Calculations by Lakbima News show that second-phase subscriptions declined by approximately 68.3% between the two auctions.
The decrease occurred even though the government accepted more borrowing overall during the latest issuance.
| Measure | 14 October | 21 October |
|---|---|---|
| Amount offered | Rs. 90bn | Rs. 100bn |
| Primary allocation | Rs. 66.126bn | Rs. 80.611bn |
| Second phase | Rs. 7.206bn | Rs. 2.282bn |
| Final accepted | Rs. 73.332bn | Rs. 82.893bn |
Total accepted issuance increased by Rs. 9.561 billion between the two weeks.
That represents growth of approximately 13.0%.
The final accepted amount nevertheless remained below the advertised offering at both auctions.
Government raises Rs. 17.107 billion less than offered
The Public Debt Management Office initially offered Rs. 100 billion in Treasury bills for the October 21 auction.
Investors submitted bids worth Rs. 186.002 billion during the primary auction.
The government accepted Rs. 80.611 billion at that stage.
The second subscription phase increased the final amount to Rs. 82.893 billion.
That leaves a difference of Rs. 17.107 billion between the original offering and the final accepted amount.
Rs. 100.000bn: Amount originally offered.
Rs. 186.002bn: Bids received during the primary auction.
Rs. 80.611bn: Accepted at the primary auction.
Rs. 2.282bn: Additional amount accepted in the second phase.
Rs. 82.893bn: Final accepted issuance.
Rs. 17.107bn: Difference between the offering and final accepted amount.
The figures show that the government accepted less than the amount originally offered despite receiving substantial bids.
The auction reports do not provide the full distribution of rejected bid yields.
They therefore do not establish whether the difference resulted primarily from pricing decisions, investor preferences across maturities or other debt-management considerations.
Short-term securities remain dominant
The October 21 primary auction was heavily concentrated in 91-day Treasury bills.
The government accepted Rs. 70.391 billion in that maturity, representing approximately 87.3% of the primary allocation.
The second-phase announcement provides the additional amount accepted but does not give a separate allocation breakdown for each maturity.
Consequently, the final percentage allocated to 91-day bills cannot be calculated precisely from the second-phase announcement alone.
The Rs. 70.391 billion accepted in 91-day securities at the primary auction represents at least approximately 84.9% of the final Rs. 82.893 billion issuance.
The latest result therefore confirms that short-term securities accounted for the majority of accepted borrowing.
Yields remain unchanged during the second phase
The Public Debt Management Office confirmed that the second-phase subscriptions were accepted at the weighted average yields established during the primary auction.
Those yields were 9.32% for 91-day bills, 9.44% for 182-day bills and 9.95% for 364-day bills.
The final announcement does not report a separate yield determination for the additional subscriptions.
Settlement is scheduled for October 23.
Lakbima News previously examined the October 14 auction, when the government received Rs. 180.735 billion in bids and accepted Rs. 73.332 billion after both phases.
The newly published October 21 final result provides a comparison of the additional borrowing accepted after the primary auctions closed.
One week’s reduction in second-phase subscriptions does not establish a sustained change in investor demand.
Further auction results would be needed to determine whether the latest maturity distribution and second-phase participation continue.
