3.3 per cent of Merkanti Holding plc’s bondholders voted against amendments made to an existing bond issue. The changes will see an extension in maturity date and increase in interest rate.

The changes were first announced last May, when the company stated that it would be proposing these amendments with a view to “extend bondholders’ ability to participate in the company” at an interest rate reflective of the current climate, while also maintaining its balance sheet diversification through what Merkanti Holding described as a “fiscally responsible transaction.”

The amendments will see the bond issue, first issued on 18th July 2019 with an outstanding principal amount of €25 million, have its interest rate increased from four per cent to 5.7 per cent, while its maturity date will be extended by a further seven years from 2026 to 2033.

Bondholders on the company’s register of bonds as at the close of business on 26th July 2024 are entitled to a one-time bonus interest payment of 0.8 per cent of the nominal value of the bonds held. This will be paid on 12th August 2024 together with accrued interest due at four per cent.

In a market update earlier this month, Merkanti Holding confirmed that the changes were approved during a bondholder meeting.

Merkanti Holding is the holding and finance company of Merkanti Group, comprised of the activities of Merkanti Bank Ltd, a regulated bank, as well as Merkanti (A) International Ltd and Merkanti (D) International Ltd, two industrial real estate companies in Germany.

In its latest update, the company stated that the changes came into effect from 12th July 2024.

However, bondholders holding €706,900 in nominal value of the bonds, representing 3.3 per cent of all outstanding bonds, voted against the proposed amendments.

Aside from having the option to sell their bonds on the market at any time prior or subsequent to the bondholder meeting, the company also provided these dissenting bondholders with a separate offer.

The dissenting bondholder offer allowed these bondholders to sell their bonds to the company between 4th July 2024 and 11th July 2024 at a price of €98.98 per bond. This represented the volume-weighted-average price for the 180 trading days prior to the initial announcement about the amendments.

Despite this, Merkanti Holding stated that none of these bondholders exercised their rights under the offer, and therefore, “the company did not repurchase any of the bonds.”