Debenture Bonds

These were the first capital market products offered by the bank and represent the bank’s largest source of funding.

Typical bond terms are as follows:

  • Fixed or floating interest (coupon) rates
  • Taxable or tax free interest income
  • Interest paid semi-annually or at maturity
  • Principal repaid at maturity

The bonds are attractive to investors looking for:

  • High quality interest income investments
  • Guaranteed principal
  • Assets which qualify for the Statutory Deposit and Fund under the Insurance Act
  • Assets which pay regular semi-annual interest

Taxable equivalent rate for tax free bonds:
Using the formula below: 6.75% tax-free is equivalent to 9.0% taxable for companies with a 25% marginal tax rate.