Mercury Projects Finance plc, the financing arm of Mercury Group, on Friday (today) announced that it has received regulatory approval from the Malta Financial Services Authority (MFSA) for a €20 million secured bond issue.

The new bond issue, guaranteed by Mercury Towers Ltd, was announced last week.

This represents the fourth bond issue released by the company in the space of six years.

In 2019, it announced two related bond issues, one for €11.5 million with a 3.75 per cent coupon rate, and another for €11 million with a 4.25 per cent coupon rate. These will mature in 2027 and 2031, respectively. The funds from these issues were primarily used to construct and finish elements of the Mercury Tower project.

This was then followed by a substantial €50 million secured bond issue in 2022, that will mature in 2032. This carried a coupon rate of 4.3 per cent, with approximately €35 million being used to construct and finished the company’s hotel, operated by Meliá Hotels International, while €15 million were allocated to general corporate funding.

Following the new bond issue, the finance company will have raised approximately €92.5 million in the form of outstanding bonds.

The new bonds, which will mature in 2034 and have a nominal value of €100 per bond issued at par, will carry a coupon rate of 5.3 per cent.

Mercury Projects Finance is owned by Mercury Towers Ltd, which is also the parent company of Mercury Hotel Ltd, Mercury Car Park II Ltd, and Mercury Commercial Mall Ltd. These subsidiaries’ objectives are to own, develop and operate different areas of the Mercury Towers project in St Julian’s.

Additionally, the company also released its prospectus for the bond issue, providing further details on why it is being issued.

Mercury Projects Finance stated that approximately €5 million of the proceeds will be used to refinance an outstanding Bank of Valletta (BOV) loan that is due by Mercury Towers Ltd to the bank.

The loan had originally been utilised to finance part of the completion and finishing costs of the Mercury Towers project.

A further amount of around €7.8 million will be used to finance the remaining development costs of the project, including its completion and finishing.

Approximately €7.3 million, together with any amounts not utilised for the aforementioned purposes, will be allocated to general corporate funding purposes. This includes the expenses tied to the bond issue, which are expected to come out at a total of €750,000.

The offer period is expected to run from 2nd to 30th August 2024. On 30th August, there will be an intermediaries’ offer.

Interest will commence from 10th September 2024, which is also the date expected for the announcement of basis of acceptance. On 20th September 2024, the company expects the dispatch of allotment letters, and is the latest date of admission of bonds to listing.

The latest date of commencement of trading in the bonds is 23rd September 2024.