COM Bank to promote SLDBs in USD

Sri Lankans living overseas and foreigners have an opportunity to participate in developing Sri Lanka while earning a higher interest by investing in Sri Lanka Development Bonds (SLDBs) through the Commercial Bank of Ceylon PLC, following the Bank's appointment by the Central Bank as a designated agent to promote this scheme.

"SLDBs are US Dollar denominated bonds which allow investments in a floating rate bond pegged to the six month USD London Interbank Offer Rates (LIBOR) and yield higher interest rates than standard fixed deposits," the Bank said.

Investment could be made in SLDBs from the latest issue for a two-year period, maturing on June 29, 2011. The minimum investment required is USD 100,000 and investments can be made in multiples of USD 10,000. Transfer of bonds can be done through endorsement, delivery and registration and the bank will handle this on behalf of the investor.

Investors will earn six months LIBOR plus an attractive margin. The six months LIBOR would be 1.11375 percent per annum for the first six months ending December 29, 2009. For example, if the investor gets a margin of 3.00 percent, he or she will be able to earn an interest rate of 4.11375 percent per annum for the bond for the next six months ending December 29, 2009.

"Beside the fact that these are gilt-edged investments, partnering a bank that is a benchmark of stability, has a network of 171 branches islandwide and has been adjudged the best bank in Sri Lanka many times over would make it a special experience."

Commercial Bank's Head of Global Treasury Dula Weeratunga said, "Under this scheme, the Income Tax paid in Sri Lanka will be reimbursed by the issuer and no currency conversion risk will occur since funds are invested in US Dollars," he said. Interest payments for the bonds will be made semi annually on December 29, 2009; June 29, 2010; December 29, 2010 and June 29, 2011.

Several categories of investors are eligible to invest in these bonds. These include, citizens of foreign states whether resident in Sri Lanka or outside Sri Lanka, citizens of Sri Lanka who made their permanent abode outside Sri Lanka; citizens of Sri Lanka who have proceeded outside Sri Lanka to take up employment or to set up a business or engage in a profession; citizens of Sri Lanka who have dual citizenship provided that those citizens substantial place of abode is outside Sri Lanka; bodies corporate or established under the laws of a country other than Sri Lanka; specified companies that have entered into agreement with the Board of Investment of Sri Lanka and specified insurance companies registered under the Regulation of Insurance Industry Act. The offer however, is not open to citizens or companies in the US.