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Treasury Bills & Bonds

Outright sales and purchases

What is a Treasury Bill?
A Treasury Bill is a Negotiable Debt Instrument issued by the Government of Sri Lanka to direct monetary policy or to finance government expenditure. Treasury Bills provide a safe, secure investment as the investor assumes the credit risk of the Government (also known as Sovereign Risk).

When are Treasury Bills issued and for what periods?
Bills are issued in tenors of 3 months, 6 months and 12 months. Primary Dealers bid for Treasury Bills at auctions held on Wednesdays. Treasury Bills are issued on Fridays, and maturities too are set for Fridays. Interest is paid at maturity. Weekly auction rates are made available to the investing public via newspaper announcements. There is an active secondary market for Treasury Bills.

What are Treasury Bonds and how do they work?
Government of Sri Lanka Treasury Bonds are issued for 2, 3, 4, 5 and 10 years. These bonds pay a semi-annual coupon of interest at a fixed rate. Bonds are auctioned by the Central Bank on behalf of the government as and when required. There is an active secondary market for Treasury Bonds too.

What are Development Bonds and how do they work?
Government of Sri Lanka Development Bonds are dollar-denominated instruments that are issued for 2 and 3 years on an auction basis. Interest is paid semi annually on a variable rate based on 6 month LIBOR rate plus a fixed margin. The minimum investment amount in the secondary market is USD 10,000/-. Foreign Citizens and Entities, Non Resident Sri Lankans, Sri Lankan dual citizens, Authorised Dealers, Primary Dealers and Specified companies that have entered into agreements with the Board of Investment of Sri Lanka and Insurance Companies registered under the Regulation of Insurance Industry Act are permitted to invest in these instruments.

What are Sovereign Bonds?
Sri Lanka Sovereign Bonds are issued by the Government of Sri Lanka for 5 or 10 years, the proceeds of which are utilised for development activities. Investment is usually limited to non-Sri Lankan entities.

For the necessary application forms, click here