The European Investment Bank (EIB), the EU's long-term financing institution, launched its first ever bond issue in Maltese liri on Friday. This bond issue for Lm10 million, which is being fully underwritten by Bank of Valletta, carries a coupon of 3.8% per annum and matures in 2009.

The sponsor for this transaction is BoV Stockbrokers Ltd, and Bank of Valletta is also acting as manager and registrar. An application has been made to the Malta Stock Exchange for the listing of these bonds.

The issue will be open to both institutional and retail investors. Application forms and the offering memorandum will be available as from tomorrow 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. Institutional investors may apply for pre-placements on Friday; aggregate allotments in relation to pre-placements may not exceed 50% of the bond issue.

The subscription period will open on March 8, closing on March 12. The basis of acceptance will be announced on March 22 or earlier if the subscription lists are closed before March 12.

This bond issue reflects EIB's commitment to developing its issuance activities in the currencies of EU-acceding countries. After government issuers, the bank is 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.

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 in future member states, a significant increase from the €3.6 billion lent in 2002. Lending to future and new member atates has been and remains a key growth area for EIB.

In Malta EIB has provided financing for a total of €69 million since 1990, including loans to projects in the water, environmental and transport sectors.

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