APS announces €50 million bond issue

APS Bank has announced a €50 million bond issue as part of its plans to strengthen capital and in line with regulatory requirements.

The first series under the programme are unsecured subordinated bonds at a 5.8% coupon running from 2028-2033. “This bond issue is not only another important milestone in the Bank’s journey but a testament to our commitment to grow, and to further create value for our customers, investors and all stakeholders,” said CEO Marcel Cassar.

The net proceeds constitute an integral part of the bank’s capital plan to further strengthen its Tier 2 Capital requirements in terms of regulatory requirements, and will be used to meet part of its general financing requirements.

The bank’s CET 1 ratio as at 30 June 2023 stood at 15.8%. In 2019, the bank prepared a ‘Capital Development Plan’ aimed at expanding its capital base in phases to support growth trajectory, regulatory requirements and overall long-term strategy.

Phase 1 of the plan was concluded during the second quarter of 2019 through a rights issue of €13 million, which, coupled with the 2018 retained earnings of €12 million, saw CET 1 increase by a total of €25 million. Phase 2 was concluded in 2020 through the issue of the existing bonds. This was the first time that the bank resorted to Tier 2 funding to satisfy its capital requirements and support its growth strategy.

Phase 3 of the capital development plan was achieved through the IPO, the net proceeds of which amounted to approximately €65 million, which strengthened the Bank’s CET 1 and its level of capital buffers as required under relevant European Banking regulation.

The offer opens Monday, 30 October and closes Friday 17 November 2023, or earlier at the bank’s discretion. Applications will be accepted at all APS branches or authorised intermediaries. Allocation preference will be given to existing holders of the Bank’s ordinary shares or the 3.25% Subordinated Bonds 2025-2030 as at Monday 23 October 2023. These investors will be receiving a pre-printed application form at their address provided in the Central Securities Depository Register.