Bank of Valletta yesterday launched a €35 million, 10-year subordinated bond issue, with an over-allotment option of up to €15 million.

The bonds have an annual coupon of 5.35 per cent with interest payable semi-annually in mid-June and mid-December.

A proportion of the issue is being reserved for bank shareholders and employees and for pre-placements made by the public. All preferred applications and other pre-placements will be accepted until June 4. Subscription lists to the public will open on June 8.

Bank of Valletta Group chief executive officer Tonio Depasquale told a press conference yesterday that the bond issue aims to further strengthen the bank's capital base.

"This bond issue forms part of Bank of Valletta's proactive capital management process which entails periodic consolidation of its regulatory capital, in anticipation of future internal and external requirements," Mr Depasquale explained.

"As the largest financial services provider in Malta, BoV gives top priority to prudent and efficient asset and liability management. Its capital adequacy and liquidity ratios rank with the strongest in Europe and through this bond issue, BoV is ensuring that it remains 'ahead of the curve'. Furthermore, the bank also seeks to optimise the mix between its Tier 1 and Tier 2 capital."

Earlier this month, BoV reported operating profits for the first six months of its financial year of €10.1 million (FY 2008: €21.9 million).

Mr Depasquale said the bank had continued to provide credit and liquidity to the local economy, despite the challenging market conditions, with a "business as usual" approach.

More details on the bond issue may be obtained from any BoV branch, the Customer Service Centre (tel. 2131 2020), www.bov.com or stockbrokers.