Izola Bank plc - Details of New Bond Issue

On 11 June 2010 Izola Bank plc issued a base shelf prospectus (the “Prospectus”) in respect of a Debt Issuance Programme for a total of €27 million secured notes. Also on 11 June, Izola Bank plc announced the first tranche of the Debt Issuance Programme with a €7 million secured bond issue at a coupon of 5.35% per annum. The bonds have a final maturity date of 30 June 2015 and pay interest annually on 30 June. The Issuer reserves the right to increase the amount up to a further €2 million in the event of over-subscription.

Coupon:

5.35%

Amount Offered:

€7 million

Over-allotment Option:

€2 million

Tranche:

1st Tranche of €7 million (+€2 million in case of over-allotment) from a €27 million Debt Issuance Programme

Issue Price:

100% (par)

Interest Payment Date:

Annually on 30 June

Maturity:

The bonds will mature at 100% (par) on 30 June 2015

Intermediaries’ Offer Closing Date:

21 June 2010

Minimum application for bonds:

€1,000 and in multiples of €1,000 thereafter.

Listing:

Official List of the Malta Stock Exchange

Use of Proceeds:

The net proceeds from this bond issue will be primarily used to support the general growth of the Bank mainly through the expansion of its factoring, credit card and short-term credit facilities business. Izola Bank intends offering increased credit card limits as well as introducing a new overdraft facility. Izola Bank is also planning to introduce a system through which clients can download an electronic copy of invoices from the Van Marcke Group and also settle these invoices online.

Security:

Secured

The Notes are secured by virtue of a pledge over the factoring receivables held by the Issuer. The pledge will be held by HSBC Bank Malta plc as the Security Trustee for the benefit of the Note Holders. The pledged amount of receivables shall not be less than 120% of the outstanding nominal amount of the Notes. If the value of the trade receivables falls below this 120% threshold, Izola Bank will make good for the difference by depositing cash in a pledged account also with HSBC Bank Malta plc. The trade receivables will be audited by KPMG on a quarterly basis.

Downloads:

Izola Bank plc – Prospectus 10 June 2010

Izola Bank plc – Final Terms 10 June 2010

Izola Bank plc – Authorisation to Apply Form – June 2010

Izola Bank plc – 2009 Annual Report

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