Merkanti Holdings has announced that it expects to pay a delayed bond interest payment within the 60-day grace period allowed under the terms of its 5.7 per cent €25 million bond issue.

In a market update posted on Tuesday (today), the company said it is in the process of selling an asset, and finalising a bridge financing agreement that would allow for the early realisation of the proceeds from the sale, which would go towards the bond interest payment.

The development follows the announcement last week that Merkanti Holding would be delaying the €1.425 million interest payment that was due to bondholders, although WhosWho.mt understands that part of the interest due has already been paid out.

Market insiders who spoke to this newsroom cautioned against any market panic, noting that although delayed interest payments and selling assets to cover operational expenses like interest payments are never a good sign, they must be seen in the context of the group’s restructuring efforts.

In early 2026, Merkanti Holding’s Board voted to voluntarily surrender the Maltese banking licence held by its subsidiary Merkanti Bank.

At the time, it stressed that the transition is not expected to have a material impact on the group’s financial position or on its ability to meet obligations to bondholders.

Merkanti Bank, formerly known as BAWAG Malta Bank, operates as a specialist trade and structured finance bank and is a subsidiary of Scully Royalty Ltd, which is listed on the New York Stock Exchange.

Two stockbrokers who spoke to WhosWho.mt on condition of anonymity said the latest development should be seen as a situation that stakeholders should keep a close eye on, rather than one that merits serious concern.

One pointed out that the company’s “dry” statements give interested parties little information to go on, but warned against rushing to conclusions.

“If you look at the broader picture, you’re looking at a bond that is fully secured with good quality assets held by a trustee. The bank itself, as at the end of last year, had substantial cash and short-term holdings of around €12 million (over and above customer deposits) which will be distributed as dividends to its parent company, the bond issuer. These factors should give investors a degree a confidence.”

Nonetheless, both market insiders warned that much depends on what will happen in the next months.

“It’s never good that a company misses an interest payment. And it’s rarely good that it sells off assets to finance operational expenses like interest payments. At some points you will run out of assets to sell. So it’s clear that there is an issue somewhere.

“Now, if a situation like this is a one-off occurrence due to specific circumstances, it can be understandable. What investors and other stakeholders should look out for is whether these developments are followed by stabilisation, or by further concerning signals.”