Bay Street's bond issue

Bay Street Finance plc on Friday launched a public bond offering of Lm3 million, with an over-allotment option of another Lm3 million, issued at par at 8% interest, payable annually. Each bond has a nominal value of Lm100.

The bonds go on sale from June 10 and the offer will close on June 20 or earlier at the company's discretion. The bonds are due for redemption on June 26, 2012. This was announced during the launch of the bond issue by Tony Mejlaq, chairman of Business Process Consulting, the company engaged on a five-year contract to manage and operate the Bay Street Tourist Complex.

In his address, Mr Mejlaq said that at a time when investors were keener to look at bond investments, rather than shares, they tried to present an innovative product, a bond with an attractive interest coupon, which could be exchanged for shares (at the investors' option) of Bay Street Holdings Ltd at 107% in the event of an offer taking place between 2005 and 2012.

The proceeds of the bond will be used to reduce outstanding amounts due to capital creditors and refinance existing banking facilities. An application has been made to the Malta Stock Exchange (MSE) for the bonds to be listed on the exchange's Alternative Companies List (ACL).

Bay Street was a success story and, following its inauguration in November 2000, the complex had grown from strength to strength, he added. The complex, composed of 16 food and beverage operators, 10 services outlets and 40 retail outlets, has always enjoyed 100% occupancy.

The Bay Street Tourist Complex is designed to complement rather than compete with existing establishments in the St George's Bay area, bringing together a variety of tourist accommodation facilities, retail outlets, food and beverage operations, and daytime and night-time entertainment facilities both within and outside the complex.

The Bay Street Tourist Complex also provided an Artisan Market, offering a unique platform for the creative arts for a captive market generated by the Bay Street Hotel itself and other surrounding four- and five-star hotels.

Mr Mejlaq concluded that Bay Street was designed to the highest artistic specifications so that the complex offered the best avenue for the organisation of events.

The open street environment, as well as the rotunda and terrace, are now considered by a number of local companies as popular places for marketing and promotion activities. These, with a number of daily activities, create a unique entertainment venue, which is not found in any other complex. Such activities also ensure a greater flow of people to the complex.

Lombard Bank will be acting as manager and registrar for the Bay Street Finance plc bond issue. The sponsoring stockbroker is Wilfred Mallia of Charts Investment Management Service Ltd. The auditors and reporting accountants are Vincent Curmi & Associates, together with Deloitte & Touche.

The legal advisers to the guarantor are Sapiano and Associates. Dr Roderick Zammit Pace is legal adviser to the issuer on the bond issue.

The bonds will be sold through all licensed stockbrokers and financial intermediaries, from whom application forms and copies of the offering memorandum can be obtained.