The Bank of Ceylon is planning to raise 3.0 billion rupees in five year funds through the sale of unsecured, redeemable debentures with the option of to sell a further 3.0 billion rupees of bonds if the first tranche is oversubscribed.
The bonds will be listed on the Colombo Stock Exchange
Type A debentures with a coupon of 16.0 percent will pay interest once a year. Type B floating rate bonds will pay the 6 month Treasury bill yield plus 125 basis points.
Type C bonds will pay a fixed coupon of 15.25 percent every six months, giving an effective annual return of 15.83 percent, a prospectus said.
In Sri Lanka interest on debentures is subject to a 10 percent withholding tax.