Bank of Valletta plc - Issue of €350 million Callable Senior Non-Preferred Notes

On 6 December 2022, Bank of Valletta plc announced that following the approval granted by the Central Bank of Ireland in relation to the issue of a euro medium term note programme of up to €500 million, the Bank launched a callable senior non-preferred note which was offered on both the local and international markets.

The Notes were issued on 6 December 2022 in registered form. Given their complexity, the Notes were not available to the retail market, but could only be subscribed for by professional investors and eligible counterparties for a minimum of €100,000 (nominal). The Notes were rated by Fitch as ‘BBB-‘ and their final maturity date is 6 December 2027.

Subject to regulatory approval, BOV will have the right to call the Notes in whole, but not in part, on 6 December 2026 at €100 (par). The coupon was set at the fixed rate of 10% per annum, payable annually in arrears on 6 December in each year up to and including the maturity date and commencing on 6 December 2023. If not called, interest on the Notes will be reset at a margin of 731 basis points plus the one-year euro mid-swap rate on 6 December 2026.

The issue attracted an order book of high-quality real money accounts of around €460 million, evenly split between domestic and international investors. Investor participation was a diverse one, with official institutions accounting for around 32.1% of the Notes allocated, followed by public and private banks at 28%, asset managers at 24.5% and hedge funds at 13.1%. In terms of geographical diversification, domestic accounts were allocated 53.7% of the final size and 46.3% were allocated to a portfolio of international investors with US offshore representing 10.8%, followed by Germany and Austria (10.6%), the UK (9.4%), Italy (7.8%), Iberia (3.3%), and Switzerland (2.6%).

The net proceeds from the issue of Notes will be used to further strengthen the MREL requirements of the Bank and its consolidated subsidiaries, thereby allowing BOV to increase its lending book and expand the investment horizon of its proprietary investments, as well as for the general financing purposes of the Group. The Notes are expected to be admitted to listing on the official list and to trading on the regulated market of the Irish Stock Exchange (trading as Euronext Dublin) with effect from on or around 6 December 2022.