By Shihar Aneez and Ranga Sirilal
COLOMBO, March 6 (Reuters) - HSBC ,Citibank and Barclays will be the lead managersfor an international bond sale of up to $1 billion for SriLanka's state-owned National Savings Bank (NSB), sources said onWednesday.
One of four sources with knowledge of the deal said the NSBmay go to the international market either later this month ornext month.
"HSBC, Citibank, and Barclays have been selected as thejoint lead managers to borrow up to $1 billion from aninternational bond sale," the source told Reuters.
Three other sources also confirmed the deal.
NSB's General Manager, Hennanayake Bandara, declined tocomment on the deal.
If it succeeds it will be the biggest ever Sri Lankancorporate bond. State-owned Bank of Ceylon last year sold a $500million five-year bond at a 6.875 percent yield.
NSB is the only bank whose deposits are fully guaranteed bythe government.
The bank's investments in government securities accountedfor 72 percent of its total deposits of 422.06 billion rupees($3.31 billion) as of Sept. 30, 2012.
The bank's decision to tap international market comes as SriLanka had decided not to go for an international sovereign bondthis year after the island nation sold three $1 billion, 10-yeareurobonds in the previous three consecutive years.
Finance Secretary P.B. Jayasundera, speaking at a forum lastweek, said the government has permitted banks to raise fundsthrough international borrowing this year.
"Our banks must start marketing their balance sheet. Our(government) balance sheet has been sufficiently marketed. Idon't think we should expose it further," he said.
Jayasundera also said the government had permitted listeddevelopment lenders DFCC Bank and National DevelopmentBank to go for foreign commercial borrowing this yearwith the government sharing some of their risks.