Izola Bank plc - Details of New Bond Issue
On 26 July 2022, Izola Bank plc published a Prospectus in relation to the issuance of €14 million 5.00% unsecured subordinated bonds maturing between 2027 and 2032. The salient details of the new bond issue are as follows:
Amount Offered:
€14 million (nominal)
Coupon:
5.00%
Issue Price:
100% (par)
Interest Payment Date:
Annually on 15 September (first interest payment date is 15 September 2023)
Maturity Date:
The bonds will mature on 15 September 2032. However, Izola Bank reserves the right to redeem any or all of the bonds on any date between 15 September 2027 and 15 September 2032 subject to giving bondholders at least 30 days’ notice and also subject to regulatory approval.
Status:
The bonds will constitute the subordinated and unsecured obligations of Izola Bank and will, at all times, rank pari passu, without any priority or preference among themselves, and with other subordinated debt of the Bank, present and future. In the event of the dissolution and winding up of the Bank, the claims of bondholders in respect of the payment of capital and interest on the bonds will be subordinated to the claims of all depositors and other unsubordinated, secured and unsecured creditors of the Bank. If, on a dissolution and winding-up of the Bank, the Bank’s assets are insufficient to enable the Bank to repay the claims of more senior ranking creditors in full, the bondholders will lose their entire investment in the bonds. If there are sufficient assets to enable the Bank to pay the claims of senior-ranking creditors in full but insufficient assets to enable it to pay claims in respect of the bonds and all other claims that rank pari passu with the bonds, bondholders may lose all or part (which may be substantial) of their investment in the bonds.
Use of Proceeds:
The net proceeds from the bonds, estimated at €13.45 million after issuance costs, will constitute an integral part of the Bank’s capital plan with a view of further strengthening its Tier 2 capital position. Any funds raised other than from existing bondholders will be used by the Bank to meet part of its general financing requirements.
Plan of Distribution:
The bonds will be made available for subscription as follows:
- an amount of up to €8 million has been reserved for subscriptions by holders of the €12 million 4.5% unsecured bonds 2025 (the “Exchangeable Bonds”) as at close of trading on 13 July 2022. Eligible bondholders who subscribe for the new bonds by surrendering the corresponding nominal value of the Exchangeable Bonds will benefit from a premium of 2.5% on the nominal value of the Exchangeable Bonds being surrendered. Eligible bondholders will also have preference to subscribe for the new bonds in excess of the existing amount held in the Exchangeable Bonds.
- an amount of up to €6 million will be available for subscription by Authorised Financial Intermediaries through an Intermediaries’ Offer.
Any amounts not subscribed for by existing bondholders (when also including top-ups) will also be available for subscription by Authorised Financial Intermediaries through the Intermediaries’ Offer. All subscriptions are subject to a minimum amount of €10,000 (nominal). Since the bonds are ‘complex’ financial instruments, all Retail applicants (as defined by the MFSA Conduct of Business Rulebook – including existing bondholders) will be subjected to a ‘Suitability Test’.
Offer Period:
1 August 2022 to 12:00 hours (noon) on 7 September 2022 (or earlier as may be determined by the Bank in the case of over-subscription)
Minimum Subscription Amount:
€10,000 (nominal) and in multiples of €100 thereafter. Interested applicants are kindly requested to contact us for further information on the detailed application procedure.
Listing:
Official List of the Malta Stock Exchange
Risk Factors:
Izola Bank plc is subject to a number of risks pertaining to the nature of its business and its listing and/or trading on the market. Prospective investors are urged to read in detail the ‘Risk Factors’ found in the Prospectus dated 22 July 2022, including but not limited to risks associated with Recovery and Resolution Regulations. Investors are advised that in the event that the Issuer becomes subject to a resolution action, the principal amount of the bonds including any accrued but unpaid interest, may be written down or converted into equity and other resolution actions may apply. Investors may lose part or all their investment. Prospective investors are only able to acquire the bonds provided that the investment in the bonds is deemed to be suitable. Copies of the Prospectus are available by email upon request or from our website at www.rizzofarrugia.com.
Downloads:
Disclaimer:
This webpage has been prepared based on the Prospectus dated 22 July 2022 issued by Izola Bank 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.
Investors wishing to acquire the Bonds should read the Prospectus before making any investment decision in order to fully understand the potential risks and rewards associated with an investment in the Bonds. The Bonds constitute subordinated and unsecured obligations of the Bank and are classified as complex financial instruments. The Bank is subject to the Bank Recovery and Resolution Directive (BRRD) as transposed in local laws and therefore, Prospective Investors should consider the risk that, in the event that the Bank becomes subject to a resolution action, the Bonds including any accrued interest, may be written down or converted into equity, and a broad range of other resolution actions may be taken by the Resolution Committee in respect of the Bank. Therefore, investors may lose part or all their investment. The value of the investment can go down as well as up and past performance is not necessarily indicative of future performance. An investment in the Bonds of the Bank may not be suitable for all Investors and Prospective Investors are to consult their Financial Advisor to ensure the suitability of investing in the Bonds. Prospective Investors are only able to acquire the Bonds provided that the Investment in the Bonds is deemed to be suitable. A copy of the Prospectus is available on Rizzo, Farrugia & Co. (Stockbrokers) Limited’s website.
This advertisement has been issued by Rizzo, Farrugia & Co. (Stockbrokers) Limited, a company licensed to undertake investment services in Malta by the MFSA under the Investment Services Act, Cap. 370 of the Laws of Malta, and having its registered address at Airways House, Fourth Floor, High Street, Sliema SLM 1551, Malta. Rizzo, Farrugia & Co. (Stockbrokers) Ltd is acting as Joint Sponsor to Izola Bank plc.