FimBank's bond issue will support group's expansion
FimBank plc is issuing bonds to support the group's expansion into new products, markets and undertakings according Marcel Cassar, CEO and executive vice-president for Fimbank. Mr Cassar said in a statement issued by the bank, that in the medium to...
FimBank plc is issuing bonds to support the group's expansion into new products, markets and undertakings according Marcel Cassar, CEO and executive vice-president for Fimbank.
Mr Cassar said in a statement issued by the bank, that in the medium to long-term this takes place mainly through investments in joint-ventures and acquisitions, and for the future the group is looking at complementary activities to trade finance, like private banking and leasing. Such investments need to be financed by medium to long-term capital, and not from short-term liquidity. Besides, a Subordinated Bond Issue qualifies (within certain parameters) as Tier 2 Capital for the bank and this has the effect of strengthening capital adequacy ratios.
The general terms of this issue are as follows: The Bond Issue is for €15 million with an over allotment option of an additional €15 million, i.e. a total of €30 million. The bonds can be subscribed in any combination of euros or US dollars, and are fully fungible. The coupon is of seven per cent for 10-year bonds redeemable in 2019, or after 2012 at the issuer's option. The Bonds are being sold to the general public at their par value of 100, except in the case of preferred applicants, namely shareholders, directors and staff.
Preferred applicants can subscribe for the bonds at a discount of three per cent i.e. at €97 or $97, which are then redeemed at par. They are also guaranteed a minimum allotment of €10,000 or $10,000 when they subscribe at pre-placement (and where the minimum application amount is also €10,000 or $10,000).
Alternatively, preferred applicants may apply with the public where the minimum application amount is only €2,000 or $2,000, but in that case they may not be guaranteed much in the event of over-subscription. A pre- placement for this bond issue is scheduled to take place on next Friday. The aim is to allocate two-thirds of the aggregate size of the bond issue, i.e. €20 million, for pre-placement with preferred applicants and authorised intermediaries, with sub-limits of €10 million each, respectively, fully fungible. The minimum level with which an authorised intermediary can enter the pre-placement is €200,000 or $200,000. As always, the reason for the pre-placement is to enable the authorised intermediaries and their clients/investors to bring to the Issue, before it opens to the general public, a vote of confidence as well as a commitment of investment interest.
Mr Cassar adds: "We are issuing these bonds not because of some financial surgery or housekeeping that the group was in need of. Neither is this bond issue an incidental fund-raising event. On the contrary it should be seen in the wider context of our capital development plan and the capital raising ideas that we have been implementing, and will continue doing so in the future."
In recent years Fimbank had two bonus issues, a scrip dividend policy consistently every year and a rights offer in December 2007. Throughout all this, the bank's equity base doubled - both in terms of size and number of shareholders. Mr Cassar credits shareholders for the success: "Our shareholders - from largest to smallest - have supported the group through thick and thin, so we try not to miss an opportunity to reward them for their loyalty as they remain our point of reference for future support. With this bond issue we hope to increase further our investor base-our family."
Mr Cassar said in a statement issued by the bank, that in the medium to long-term this takes place mainly through investments in joint-ventures and acquisitions, and for the future the group is looking at complementary activities to trade finance, like private banking and leasing. Such investments need to be financed by medium to long-term capital, and not from short-term liquidity. Besides, a Subordinated Bond Issue qualifies (within certain parameters) as Tier 2 Capital for the bank and this has the effect of strengthening capital adequacy ratios.
The general terms of this issue are as follows: The Bond Issue is for €15 million with an over allotment option of an additional €15 million, i.e. a total of €30 million. The bonds can be subscribed in any combination of euros or US dollars, and are fully fungible. The coupon is of seven per cent for 10-year bonds redeemable in 2019, or after 2012 at the issuer's option. The Bonds are being sold to the general public at their par value of 100, except in the case of preferred applicants, namely shareholders, directors and staff.
Preferred applicants can subscribe for the bonds at a discount of three per cent i.e. at €97 or $97, which are then redeemed at par. They are also guaranteed a minimum allotment of €10,000 or $10,000 when they subscribe at pre-placement (and where the minimum application amount is also €10,000 or $10,000).
Alternatively, preferred applicants may apply with the public where the minimum application amount is only €2,000 or $2,000, but in that case they may not be guaranteed much in the event of over-subscription. A pre- placement for this bond issue is scheduled to take place on next Friday. The aim is to allocate two-thirds of the aggregate size of the bond issue, i.e. €20 million, for pre-placement with preferred applicants and authorised intermediaries, with sub-limits of €10 million each, respectively, fully fungible. The minimum level with which an authorised intermediary can enter the pre-placement is €200,000 or $200,000. As always, the reason for the pre-placement is to enable the authorised intermediaries and their clients/investors to bring to the Issue, before it opens to the general public, a vote of confidence as well as a commitment of investment interest.
Mr Cassar adds: "We are issuing these bonds not because of some financial surgery or housekeeping that the group was in need of. Neither is this bond issue an incidental fund-raising event. On the contrary it should be seen in the wider context of our capital development plan and the capital raising ideas that we have been implementing, and will continue doing so in the future."
In recent years Fimbank had two bonus issues, a scrip dividend policy consistently every year and a rights offer in December 2007. Throughout all this, the bank's equity base doubled - both in terms of size and number of shareholders. Mr Cassar credits shareholders for the success: "Our shareholders - from largest to smallest - have supported the group through thick and thin, so we try not to miss an opportunity to reward them for their loyalty as they remain our point of reference for future support. With this bond issue we hope to increase further our investor base-our family."