Treasury Bonds
A Treasury Bond (T-Bond) is a zero default-risk, extremely liquid medium to long term debt instrument issued by the CBSL which consists of maturity period ranging from 2 to 25 years with semiannual coupon payments.
Unlike a T-Bill, the holder of a T-Bond will be entitled to semi-annual periodic interest payments (coupon interest) which are paid at a predetermined fixed rate and a date during the life of the T-Bond. Depending on the yield and the coupon rate, the price (per 100 rupees) of a T-Bond, can either be more than Rs. 100 (premium) or below Rs. 100(discount).
While offering higher return than other fixed income investments, T-Bond investments can be liquidated instantly by way of the secondary market. T-Bonds provides excellent opportunities of enhancing returns by earning capital gains by way of trading and are available in almost any duration and are accepted as collateral in the banking system.
Treasury Bond Rates
As of 2025-01-01 (for a tradable volume)
| Duration | Bid(%) | Offer(%) |
|---|---|---|
| 1 Year | 9.5 | 9.4 |
| 2 Years | 9.85 | 9.75 |
| 3 Years | 10.15 | 10.1 |
| 4 Years | 10.7 | 10.65 |
| 5 Years | 11.05 | 11 |
| 6 Years | 0 | 0 |
| 7 Years | 0 | 0 |
| 8 Years | 0 | 0 |
| 9 Years | 0 | 0 |
| 10 Years | 0 | 0 |
(subject to market conditions)
FAQ
Can I borrow against my investment?
Yes. Any owner of a T-Bond can borrow against it by pledging it as collateral at a fixed rate. The borrowing period can be a lesser duration than the T-Bond investment period. The borrowing rate will depend on the market interest rate at that time.
Can I realize capital gains?
Yes. If the market interest rates drop below your purchase yield, an investor can realize capital gains by selling the T-Bond.
Will I get a certificate for my T-Bond investments?
All T-Bonds are issued in scripless form without a paper certificate.
Can I transfer the ownership?
Yes. Ownership of a T-Bond can be transferred easily to another.
Can I place a bid for the T-Bond auction through you?
Yes. Our well experienced team will guide you and advice you based on current market and economic condition to ensure you receive the highest yield of acceptance.
Are the T-Bonds interest income liable for WHT?
No. No Withholding Tax will be deducted from the earnings.
Are the T-Bonds income liable for Income Tax?
Yes. If you are an income tax payer.
Are there any charges for investing in a T-Bond through WTSL ?
All secondary market rates quoted by WTSL are net of WTSL’s Charges.
For each successful bid at the primary T-Bond auction the customer will be charged LKR 10,000/-
