Subscription lists for the European Investment Bank bond issue open tomorrow. Application forms and the bond offering memorandum have been available at banks and stock brokers for the past week. The total bond issue amount is of Lm10 million, but half that figure was made available to institutional investors on Friday.
This is the first ever bond issue in Maltese liri by an AAA-rated supranational issuer. It is fully underwritten by Bank of Valletta, which is also the manager.
The bonds carry a coupon rate of 3.8 per cent and mature in 2009. They have a nominal value of Lm100 each, with a minimum application amount of Lm500. An application has been made to have the bonds listed on the Malta Stock Exchange official list.
The European Investment Bank, which is AAA-rated by Moody's, Standard & Poors and Fitch, is the first supranational institution to issue bonds denominated in Maltese liri, and to raise capital via the Malta Stock Exchange.
After government issuers, the EIB is the largest bond issuer in the future member states of the European Union. Last year alone, the bank raised the equivalent of €1.3 billion through bond issues in these countries.
"This growth in borrowing in local currency has supported continued lending growth and EIB's position as the largest external lender in the region," Barbara Bargagli-Petrucci, head of capital markets at the European Investment Bank, said.
"We believe that these 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."
The bank has also lent some €25 billion in future member states over the past 14 years. Last year alone, €4.6 billion in loans were made in these countries. In Malta, the European Investment Bank has provided financing to a total of €69 million since 1990, including loans for projects in the water, environment and transport sectors.
The EIB, which is based in Luxembourg, was set up in 1958 under the Treaty of Rome. Its shareholders are the member states of the European Union, and Malta will become a shareholder along with the other nine acceding countries after May 1.