Business • February 29 2004

European Investment Bank launches its first bond issue in Maltese Liri
The European Investment Bank (EIB), the EU’s long term financing institution, launched its first ever bond issue in Maltese Liri Friday. This bond issue for an amount of Lm10 million, which is being fully underwritten by Bank of Valletta, carries a coupon of 3.8 per cent per annum and matures in 2009. The Sponsor for this transaction is BOV Stockbrokers Ltd., whilst Bank of Valletta is also acting as Manager and Registrar. An application has been made to the Malta Stock Exchange for the listing of these bonds.
The European Investment Bank, which is rated Aaa/AAA/AAA (by Moody’s/Standard & Poors/Fitch), is the first supranational institution to conduct a bond issue denominated in Lm and to raise capital via the Malta Stock Exchange.
The Issue will be open to both institutional and retail investors. Application forms and the Offering Memorandum will be available as from 1 March 2004 at all commercial bank branches and other authorised distributors in Malta. The Bonds have a nominal value of Lm100 each, with a minimum application amount of Lm500. Institutional investors may apply for pre-placements on the 5 March; aggregate allotments in relation to pre-placements may not exceed 50 per cent of the Bond Issue. The subscription period will open on 8 March, closing no later than 12 March. The basis of acceptance will be announced on the 22 March, or earlier if the subscription lists are closed before 12 March.
Speaking about the issue, EIB Director and Head of the Capital Markets Department Barbara Bargagli-Petrucci said, “We believe that the EIB bonds can make a valuable addition to the Maltese bond market, complementing government bonds and offering investors an attractive means of diversification based on the Bank’s top quality credit standing”.
Bank of Valletta Chairman Joseph FX Zahra, meanwhile, comments, “We at Bank of Valletta have developed a specialised competence in supporting a significant number of organisations to raise capital through private placements or through equity and bond issues which are presently listed on the Malta Stock Exchange. We are today very proud to have been mandated by the European Investment Bank to act as Manager, Registrar and Underwriter to this historic Lm10 million Bond Issue – an important initiative in the continued development of the capital market in Malta.”
The Bond Issue reflects EIB’s commitment to developing its issuance activities in the currencies of EU-Acceding Countries. After government issuers, the Bank is the largest bond issuer in the EU-Acceding Countries. In 2003, issuance in EU-Acceding country currencies more than doubled (compared with 2002) to an equivalent of EUR1.3 billion. This growth in borrowing in local currency has supported continued lending growth and EIB’s position as the largest external lender in the region.
EIB lent some EUR25 billion in EU-Acceding Countries since 1990. Of the EUR42 billion lent overall by the Bank last year, a record EUR 4.6 billion was lent in future Member States, a significant increase from the EUR 3.6 billion lent in 2002. Lending to future and new Member States has been and remains a key growth area for EIB.
In Malta EIB has provided financing for a total of EUR69 million since 1990, including loans to projects in the water, environmental and transport sectors.