Global Trade Alert

On 22 November 2010, Sri Lanka through extraordinary Gazette notification no. 1681/11 permitted companies incorporated in Sri Lanka to issue and transfer convertible or non-covertible, redeemable or non-redeemable debentures denominated in Sri Lankan Rupees to foreign institutional investors, corporate bodies incorporated outside Sri Lanka, individuals and Sri Lankans resident outside Sri Lanka.
This liberalisation is subject to the following conditions: 

• Such debentures shall be listed in the Colombo Stock Exchange.
• The period of redemption or conversion of these debentures shall not be less than 5 years.
• The rate of interest shall not be higher than five year secondary market Treasury bond rate of Central Bank of Sri Lanka plus 200 basis points on the date of issue.
• Payments for the debentures have to be done through the "Securities Investment Account' at a licensed commercial bank in Sri Lanka.
• A report has to be submitted to the Exchange Control Department within 30 days of receipt of any remittance.