17 - 23 February 2000

BOV bond issue fetches over Lm20 million

by Anthony Manduca

The chairman of the BOV Group, Joseph Zahra, has announced that there has been an overwhelming response to the issue of bonds by Bank of Valletta plc with applications received on the first day of subscriptions well in excess of the Lm10m which the bank intended to issue originally.

Mr Zahra told The Malta Business Weekly that the response to the bond issue had reached about Lm22m. "BOV had made it clear that it would be able to cater for about Lm20m worth of bonds if necessary and the public's response has even surpassed this figure," Mr Zahra said.

Asked what the Bank's allocation policy would be, he replied: "We will shortly formulate an official policy but in principle we would like to give preference to the small investor, our staff and clients of the Bank."

Mr Zahra said that the excellent response to the bond issue not only showed the public's confidence in Bank of Valletta, but showed that there was need for more vehicles of investment in the country.

"The public has shown that it will respond positively to the investment vehicles being launched and that there is a great demand for such investment. Today we can offer even better rates of return than one would normally get overseas. I expect to see more listings of the Malta Stock Exchange in the future and this will help satisfy such a heavy demand for investment by the public," he said.

Financial sources told The Malta Business Weekly that such an encouraging public response to the BOV bond issue proved that the Maltese public was hungry for investment opportunities and that there was plenty of money around waiting to be invested.

"There are probably not enough investment opportunities around and the immediate huge response to the BOV bond issue is proof of this. When the

government finally decides to privatise certain Sate owned companies I am sure the public's response will be overwhelming," a stockbroker said, adding that "there is a lot of money around waiting to be invested, some of which will come from overseas".

In view of the heavy demand for the bonds shown during the first day of issue, the bank decided to close the offer only 48 hours after the opening of subscription lists. This is well before the closing date of 10 March 2000 as originally stipulated in the prospectus.

Bank of Valletta said in a statement that it would like to thank the Maltese investing public and the institutional investors for supporting this issue and for showing such confidence in the bank.

BOV said the success of the issue is undoubtedly a strong endorsement of BOV's strategy and the addition of the new subordinated funds will contribute in no small way to the expansion of the group's business activities and the further development of the existing, strong customer relationships.