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Merkanti Holding P.L.C. 4% Secured Bonds 2026

merkanti holding plc-01

Merkanti Holding P.L.C. has announced the issue of €25,000,000 of 4% Secured Bonds redeemable in 2029, with a nominal value of €100 issued at par.

If you wish to apply for these bonds see information at the bottom of this article or contact us on +356 25 688 688.

BUSINESS OVERVIEW:

The Merkanti Group comprises of Merkanti [A] & Merkanti [D] (the Property Companies) and Merkanti Bank, of which principle activities are described below:

Merkanti (A) owns the Industrial and Commercial Park Altmark, located in Arneburg, Germany, a 1,836,253 sqm piece of land that is the largest industrial and commercial park in the German State of Saxony-Anhalt, offering developed industrial and commercial land for greenfield investments as well as warehouses, production halls, workshops and offices.

Merkanti (D) owns the Dessau-Mitte Industrial Park, located in Dessau, Germany, a 111,688 sqm development property that offers office and administrative buildings, production halls and warehouses (there are currently 15 buildings in the Dessau-Mitte Industrial Park) and land for industrial investments.

Merkanti Bank is a credit institution licensed by the MFSA under Banking Act (Chapter 371 of the laws of Malta) that provides merchant banking services, including trade finance, factoring, forfaiting, treasury and correspondent banking services as well as general lending and taking of corporate deposits.

COMPANY OVERVIEW:

The Issuer is a holding and finance company that does not carry on any trading activities apart from the raising of capital and advancing the same to the Group. Accordingly, the Issuer is economically dependent on the Group. The principal activities of the Group are comprised of the activities of the Property Companies and the activities of Merkanti Bank.

USE OF PROCEEDS:

The net proceeds from the Bond Issue, which net of Bond Issue expenses are expected to amount to approximately €24,500,000, will be utilised for the purposes set out below:

  • €4,500,000 will be used to grant the Subordinated Loan to Merkanti Bank and will bear interest at a rate of 5%, with the intention that the Subordinated Loan will qualify as Tier 2 Capital and used by Merkanti Bank to increase its regulatory capital in anticipation of the expansion of its trade finance and merchant banking business.  The Subordinated Loan will bear interest at a rate of 5% and will have a maturity of approximately seven (7) years.
  • €10,500,000 will be deposited with Merkanti Bank by way of one or more term deposits, to be utilised by Merkanti Bank for the expansion of its trade finance and merchant banking business.  The interest rate on each deposit will be formalised at the time of the relevant deposits and expected to be in line with market interest rates.
  • €6,750,000 and €2,750,000 will used to grant Loans to Merkanti (A) and Merkanti (D), respectively, for the following purposes:
  1. Approximately €3,200,000 and €1,300,000 will be utilised by Merkanti (A) and Merkanti (D), respectively, for the purpose of maintaining sustainable income including, the financing of maintenance costs relating to the German Real Estate and may potentially also be utilised for the purpose of generating  further sustainable income including, construction and other development costs relating  to the German Real Estate, the acquisition of other industrial parks or similar immovable property or assets located in Germany; and
  2. Approximately €3,550,000 and €1,450,000 will be utilised by Merkanti (A) and Merkanti (D), respectively, for general corporate funding purposes.

Investors are strongly advised to carefully read the risk factors in the Prospectus.

HOW TO REGISTER TO BUY BONDS?

Applications must be for a minimum value of €2,000 and multiples of €100.

Orders will be accepted from the 24th of July 2019. All orders must be submitted by not later than the 9th of August, 2019 @ 1200hrs (Closing date).

The offer may close at an earlier date without prior notice in case of over-subscription.

A copy of the Prospectus is available HERE

Orders may be placed by reaching out to your Financial Advisor or contacting us on +356 25 688 688, via email on [email protected], or via live chat on www.cc.com.mt.