The European Investment Bank yesterday launched its first bond issue in Maltese liri.
The issue, for Lm10 million, is being fully underwritten by the Bank of Valletta and carries a coupon of 3.8 per cent per annum. It matures in 2009.
The bond is being sponsored by BOV Stockbrokers Ltd, while BoV is also acting as manager and registrar. An application has been made to the Malta Stock Exchange for the bonds to be listed.
The EIB is rated AAA by Moody's, Standard & Poors and Fitch. It is the first supranational institution to conduct a bond issue denominated in Maltese liri and to raise capital via the Malta Stock Exchange.
The issue will be open to both institutional and retail investors.
Application forms and the offering memorandum will be available from Monday at all commercial bank branches and other authorised distributors in Malta.
The bonds have a nominal value of Lm100 each, with a minimum application amount of Lm500.
The subscription period is to open on March 8, closing no later than March 12. The basis of acceptance would be announced on March 22 or earlier if the subscription lists are closed before March 12.
Finance Minister John Dalli described the bond as yet another milestone in the development of Malta's financial markets and one of several new developments currently unfolding on the financial services scene.
It was a further indication of the quality leap the country's finance industry made over a relatively short span of time, he said.
EIB's head of the capital markets department, Barbara Bargagli-Petrucci said: "We believe that the EIB bonds can make a valuable addition to the Maltese bond market, complementing government bonds and offering investors an attractive means of diversification based on the bank's top quality credit standing".
She said that after government issuers, the bank was the largest bond issuer in the EU acceding countries. In 2003, issuance in EU acceding country currencies more than doubled (compared with 2002) to an equivalent of €1.3 billion. This growth in borrowing in local currency has supported continued lending growth and EIB's position as the largest external lender in the region.
The EIB lent some €25 billion in EU acceding countries since 1990. Of the €42 billion lent overall by the bank last year, a record €4.6 billion was lent to future member states.
In Malta, the EIB has provided financing for a total of €69 million since 1990, including loans to projects in the water, environmental and transport sectors.
The bank's shareholders are the member states of the EU. After May 1, the 10 new member states, including Malta, would also become shareholders.