Bank of Valletta plc - Details of New Bond Issue

On 6 June 2019, Bank of Valletta plc published a Prospectus following regulatory approval for the admissibility to listing on the Official List of the Malta Stock Exchange of €50 million 3.75% unsecured subordinated bonds maturing between 2026 and 2031. The salient details of the new bond issue are as follows:

Coupon:

3.75%

Amount Offered:

€50 million (nominal)

Issue Price:

100% (par)

Interest Payment Date/s:

Semi-Annually on 15 June and 15 December (first interest payment date is 15 December 2019)

Maturity:

The bonds will mature at 100% (par) on 15 June 2031. However, the Issuer reserves the right to redeem all the bonds on any one of the following Early Redemption Dates subject to giving bondholders at least sixty days’ notice: 15 June 2026, 15 June 2027, 15 June 2028, 15 June 2029, or 15 June 2030.

Status:

The bonds are unsecured and subordinated to the claims of all holders of senior indebtedness. The bonds constitute the general, direct, unconditional, subordinated and unsecured obligations of the Issuer and rank, at all times, pari passu, without any priority or preference among themselves and with other subordinated obligations of the Issuer. Thus, the bonds rank after other present and future outstanding, unsubordinated and unsecured obligations of the Issuer. Subordination means that the rights and claims of bondholders in respect of the payment of capital and interest on the bonds will, in the event of dissolution and winding up of the Issuer, rank after the claims of all senior indebtedness and will not be repaid until all other senior indebtedness outstanding at the time has been settled.

It is also important to highlight that under the EU Bank Recovery and Resolution Directive (BRRD), effective as from 2 July 2014, should BOV find itself in a difficult financial position, losses are first absorbed by Tier 1 and/or Additional Tier 1 capital (equivalent to the ordinary shareholders of the bank and/or holders of other instruments that rank above ordinary shareholders but are subordinated to holders of Tier 2 instruments, senior creditors and depositors), and subsequently, by Tier 2 capital. In view that the bonds to be issued by BOV qualify as Tier 2 capital, the principal amount of the bonds, including accrued but unpaid interest in respect thereof, may be fully or partially written down or converted into Tier 1 capital in accordance with the above ranking. Further information on the implications of BRRD is available in the Prospectus dated 3 June 2019.

Use of Proceeds:

The proceeds from the bonds amounting to a maximum of €50 million (nominal) will constitute an integral part of the Issuer’s capital plan (aimed at further strengthening the Issuer’s Tier 2 Capital requirements as required by European banking regulations), and will be used by the Issuer to meet part of its general financing requirements.

Deadline for ‘Preferred Applicants’:

28 June 2019 at 12:00 hours (noon) with applications for a minimum of €25,000 (nominal) and in multiples of €1,000 (nominal) thereafter. However, the Issuer reserves the right to close the period for applications to be received from ‘Preferred Applicants’ before 28 June 2019 in the event of over-subscription by ‘Preferred Applicants’.

‘Preferred Applicants’ are:
• Bondholders of the 4.25% BOV plc notes 2019 as at close of trading on 29 April 2019, which bonds were redeemed by BOV upon maturity on 17 May 2019;
• Bondholders of the 5.35% BOV plc subordinated bonds 2019 as at close of trading on 28 May 2019, which bonds will be redeemed by BOV upon maturity on 15 June 2019;
• BOV shareholders as at close of trading on 28 May 2019; and
• BOV employees appearing on the payroll of the Issuer and its subsidiaries as at 30 May 2019, including directors sitting on the board of the Issuer or any of the subsidiaries.

Any balance of the bonds not subscribed for by ‘Preferred Applicants’ shall be made available for subscription by Authorised Financial Intermediaries through an Intermediaries’ Offer.

Minimum Holding:

The bonds on offer are subject to the condition that if a bondholder wishes to dispose of any bonds on the secondary market, the bondholder would need to retain a minimum holding of €25,000 (nominal) throughout the entire duration of the bonds. This might give rise to the possibility that a bondholder would have to dispose his/her entire holding in the bonds in order to liquidate some of his/her investment.

Listing:

Official List of the Malta Stock Exchange

Disclaimer:

The value of investments may increase as well as decrease and past performance is not an indication of future performance. Prospective investors are urged to read the Prospectus issued by Bank of Valletta plc dated 3 June 2019 including the ‘Risk Factors’ which are found in the Registration Document on pages 30 to 39, and in Section 2 of the Securities Note found on pages 69 to 72. Prospective investors are urged to consult an independent financial adviser for advice prior to investing in the bonds.

Downloads:

Bank of Valletta plc – Prospectus dated 3 June 2019.

This webpage has been prepared based on the Prospectus dated 3 June 2019 issued by Bank of Valletta plc and no representations or guarantees are made by Rizzo, Farrugia & Co. (Stockbrokers) Ltd with respect to the accuracy of the data. This webpage is for information purposes only. It is NOT intended to be and should NOT be construed as an offer or solicitation to acquire or dispose of any of the securities or issues mentioned herein. Rizzo, Farrugia & Co. (Stockbrokers) Ltd accepts NO responsibility or liability whatsoever for any expense, loss or damages arising out of, or in any way connected with, the use of all or any part of this webpage.