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International relations

Debt-heavy Sri Lanka seeks Japan's help and prepares samurai bond

Slow growth an obstacle for economy as IMF bailout conditions dent consumption

Sri Lanka plans a $500 million samurai bond issue, hoping to shore up its depleted foreign reserves and keep its economy ticking over.

COLOMBO -- Sri Lanka's central bank has turned to Japan to bolster the debt-ridden South Asian island's flagging international reserves. It is putting the final touches on a plan to issue $500 million in samurai bonds, marking the country's first foray into the Japanese market.

The yen-denominated bond issue got a shot in the arm after the Japan Bank for International Cooperation agreed to give a 95% guarantee following negotiations with Sri Lanka's central bank. The Sri Lankan government has approved three companies -- Mizuho Securities, SMBC Nikko Securities and Mitsubishi UFJ Morgan Stanley Securities -- as lead managers for the sale.

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