APS Bank has announced that the Malta Financial Services Authority has granted its approval for the issue of €50 million unsecured subordinated bonds with a coupon rate of 5.85 per cent.
The issue is the first tranche of a wider €150 million bond issue the proceeds of which are meant to constitute an integral part of the bank’s capital plan to further strengthen its Tier 2 Capital requirements in terms of European Union regulations. The funds will be used by the bank to meet part of its general financing requirements.
The unsecured subordinated bonds rank lower than other bonds, and may be subject to a write-down, conversion into equity, or complete loss if the authorities determine that the bank is failing or likely to fail.
Given that the bonds are considered complex products, potential bondholders’ eligibility needs to be confirmed through a Suitability Assessment conducted by an Authorised Financial Intermediary. This is meant to ensure that applicants thoroughly understand the merits and risks of investing in the bonds.
Of the €50 million, €15 million has already been committed to a number of third-party investors in a pre-allocation process. Therefore, the total amount available for subscription is €35 million.
The general public and preferred applicants (being directors or employees of the APS group or registered shareholders and/or bondholders of the bank as at close of business of 23rd October 2023) are eligible to participate in this bond Issue via an intermediaries’ offer as from Monday 30th October 2023.
Unless the bank decides to terminate earlier, the offer shall close on Friday 17th November 2023.
Applications for the bonds are subject to a minimum subscription of €10,000 and in multiples of €1,000 thereafter, to be issued at par.