17 - 23 February 2000

Bank of Valletta issue Lm10 million subordinated bonds issue

by a staff reporter

Bank of Valletta plc has launched an issue of Lm10m subordinated bonds, each having a nominal value of Lm100. The bonds will mature on 15 March 2010 unless previously purchased and cancelled. Interest on the bonds will be paid annually in arrears on 15 March at the rate of 6.15 per cent per annum.

Financial sources told The Malta Business Weekly that it was likely that BOV needed the bonds issue in order to finance a number of large loans that it had guaranteed for major commercial projects in the pipeline.

The new bond issue was announced by Bank of Valletta chairman Joseph Zahra during a launch presentation held at the Hotel Le Meridien Phoenicia in Floriana, for which institutional investors, Iicensed stockbrokers and other distinguished guests were invited. During his presentation, Mr Zahra spoke on the group's performance, development strategies and business objectives.

He said that this is yet another opportunity the Bank of Valletta is offering to the Maltese investor. "The bond will be a valid addition to the range of investment opportunities open to the Maltese public, and will serve as an important way in which the investing public can participate in the exciting future we see ahead for the BOV Group," Mr Zahra added.

Mr Zahra also observed that the BOV Group has grown from an institution providing traditional banking products to a strong provider of financial services, diversifying into areas such as insurance and investment business, which complement the group's core banking business.

Through the bond issue, the bank will be strengthening its capital base thus allowing it to give a better service to its customers, particularly the corporate sector which is regarded as one of high importance to its future profitability and standing in the market.

Application lists for the bonds will be accepted by all licensed stockbrokers and branches of commercial banks as from Monday 28 February. Subscription lists will remain open until Friday 10 March but the bank may decide to close the offer earlier in case of over-subscription. In such an event, the bank may exercise an over-allotment option and increase the bonds in issue up to a maximum of Lm20m.

Bank of Valletta has submitted an application with the Malta Stock Exchange for the bonds to be listed and for dealings to commence on the Exchange. As long as bonds are listed on the Exchange, any capital gains arising on disposal of the bonds are not chargeable to Maltese income tax. Listing on the exchange provides liquidity and a ready market, which feature further enhances the attractiveness of the offering.