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NatWealth raises its helping hand to contribute to the Health Care Sector in 2015 through CSR
CSR being a vital activity in NatWealth`s agenda, year 2015 too was a successful year.... more >>
Thu, 06 Oct 2016 11:12:44


Natwealth securties record another year of impressive results ending on a high note
On the backdrop of strong economic growth in Sri Lanka and in keeping with......... more >>
Thu, 09 Jul 2015 12:28:35


NatWealth builds house for flood affected victim in Maha Oya
NatWealth Group in collaboration with the Lalith Athulathmudali Foundation funded.... more >>
Fri, 12 Jun 2015 02:58:36


NatWealth Securities Limited hosted cocktails at The Kingsbury Hotel
The Chairman and Board of Directors of NatWealth Securities Limited.... more >>
Tue, 03 Mar 2015 06:03:32




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Products & services

Sri Lankan Government Guaranteed Treasury Bills (T/Bills) and Treasury Bonds (T/Bonds)


       Treasury Bills & Bonds are issued by the Public Debt Department of the Central Bank of Sri Lanka, on behalf of the Government of Sri Lanka. These instruments are issued to raise debt for short, medium & long term budgetary requirements. The Sri Lankan Treasury Bill & Treasury Bond market was opened up for foreign investors with the objective of giving them the opportunity to invest in these high yielding Gilt-edged Instruments.                            

01) Treasury Bills

  • No repayment risk - Capital plus interest guaranteed by the Government of Sri Lanka 
  • Invest on a discount basis. 
  • Face value is paid on the date of maturity. 
  • Issued in script less form, for durations of 91/ 182/ 364 Days 
  • Higher returns compared to conventional bank deposits. 
  • Tradable instrument in the secondary market. 
  • Can be used as collateral.


02) Treasury Bonds


This is considered a long term debt instrument, issued for a period of 2 - 30 years.

  • No repayment risk - Capital plus interest guaranteed by the Government of Sri Lanka. 
  • A fixed interest amount called "Coupon Interest" is paid every six months. This is calculated using the "Coupon Rate". 
  • The investment is carried out using the "Yield Rate" which is market driven. 
  • Customers can invest at a discount, par or premium price. 
  • Tradable instrument in the secondary market. 
  • Can be used as collateral.

Foreign investments in T-Bills & T-Bonds have to be routed through a SECURITIES INVESTMENT ACCOUNT (SIA) to be maintained in a commercial bank within Sri Lanka.

Eligible Investors
1) Foreign Country Funds, Regional Funds or Mutual Funds.
2) Institutions incorporated outside Sri Lanka
3) Citizens of foreign states

      Foreign Investors are at liberty to purchase Government Securities at the weekly T- Bill auctions, periodic T-Bond auctions, or in the secondary market through NWS. The interest rates are market driven and are determined by key monetary, fiscal and other economic/political factors. We will advise you regarding current interest rate trends and the most appropriate durations to invest for.

Tax treatment in Sri Lanka.
      
Eligible foreign investors who invest in Treasury Bills or Treasury Bonds pay no further tax on earnings apart from the 10% withholding tax imposed at the primary issue.

As a foreign investor how can you invest in Sri Lankan T- Bills & T-Bonds?


Guidelines/Procedures to Participating Agents on the purchase and sale of Treasury bills and Treasury bonds issued by the Government of Sri Lanka to foreign investors and non-resident Sri Lankans

03) Repurchase (Repo) / Reverse Repurchase (Rev Repo)
      Transactions in Government Securities 

      Commonly known as REPO & REV REPO. This is an arrangement where a Primary Dealer comes to an agreement with a client to borrow or lend funds against T/Bills or T/Bonds at a fixed rate, for a predetermined period. Under these agreements, one can invest or borrow money for interim periods ranging from one day to the maturity of the T/Bill or T/Bond.
Interest rates for REPO's and REV REPO's are determined by the supply and demand for money in the money market. These agreements are ideal to invest short-term excess funds at a higher interest rate than bank deposits. Also it is cheaper to borrow funds on this agreement in an emergency.

      Treasury Bills or Treasury Bonds are used as collateral in REPO and Rev REPO agreements. Therefore these agreements are safe as buying Treasury Bills or Treasury Bonds outright for short time span.

Special Features of the Repurchase / Reverse Repurchase Agreements

  • Agreements can be for period as short as one day, or as long as T/Bill or T/Bond Maturity 
  • Agreements may be discounted with the Primary Dealer, thus providing an exit window for the   investor 
  • Agreements are backed by Treasury Bills or Treasury Bonds 
  • Lower borrowing cost
  • Higher returns for idle short-term funds

04) Sri Lanka Development Bonds (SLDB's)
      The Sri Lanka Development Bonds (SLDBs) are a debt instrument denominated in US Dollars issued by the Government of Sri Lanka in terms of the Foreign Loans Act, No.29 of 1957. Repayment is guaranteed by the Government of Sri Lanka.

Guidelines/Procedures to Participating Agents on the purchase and sale of SLDB's issued by the Government of Sri Lanka to foreign investors and non-resident Sri Lankans