GO bond issue oversubscribed by €116 million

A €60 million bond issue by communications company GO has attracted more than 6,500 applications worth €146 million.

The unsecured bonds offering a 3.5% interest will start being traded on the Malta Stock Exchange on 6 July after the company announced its allocation policy.

GO said that it received a total of 2,497 applications for a total amount of €65 million worth of bonds from preferred applicants. These applications will be satisfied in full up to €2,000 worth of bonds and 24.999% on any additional amount applied for after that.

The company also received a total of 4,013 applications for a total amount of €81 million worth of bonds from the general public. These will be satisfied in full up to €1,000 worth of bonds and 7.7956% on any additional amount.

With an oversubscription running into €116 million, the bond appears to have tapped into the market liquidity that has been growing since the start of the COVID-19 pandemic.

Banks are flush with customer deposits that are earning paltry interest income, making such bond offerings an interesting option.

According to the Central Bank of Malta’s June Economic Update, residents’ bank deposits in April expanded at an annual rate of 7.4%. A month earlier, deposits increased by 7%.

The CBM update also showed that overnight deposits, which are the most liquid, grew by 9.6% in the 12 months to April after having increased by 9.4% a month earlier. Overnight deposits made up more than 85% of overall bank deposits.