Sri Lanka appoints lead managers for up to $1.5 bln sovereign bond - sources

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COLOMBO, April 27 (Reuters) - Sri Lanka has appointed seven lead managers for a sovereign bond worth up to $1.5 billion and could tap the capital market as soon as next month, a source close to the deal said on Thursday.

Finance Minister Ravi Karunanayake said the government was looking to issue a bond with a term of more than 15 years.

The banks are Citigroup (NYSE: C - news) , Deutsche Bank (IOB: 0H7D.IL - news) , HSBC, Standard Chartered Bank, Morgan Stanley (Xetra: 885836 - news) and two Chinese institutions, the source, who has direct knowledge of the deal, told Reuters.

A government source who also has knowledge of the deal confirmed the seven banks.

Karunanayake also said inflows from the bond, another $1 billion from two syndicated loans, and $500 million from Sri Lanka Development Bonds would be used to boost foreign reserves.

"We expect see a double-digit (billion dollar) reserves this year with the flows from asset leasing and some divestment from state assets," Karunanayake told reporters.

Sri Lanka's foreign exchange reserves were at $5.6 billion by end-March compared to $6 billion at the end of last year.

Sri Lanka missed the reserves target set under the terms of a $1.5 billion International Monetary Fund loan. The IMF last month urged Sri Lanka's central bank to rebuild foreign reserves while maintaining exchange rate flexibility.

(Reporting by Shihar Aneez; editing by John Stonestreet)