Bank of Valletta (BOV) has announced the launch of a new €100 million unsecured subordinated bond issue, offering a 5% annual coupon under its €250 million Euro Medium Term Bond Programme. The offer, part of the programme’s second series, opens to investors on June 9 and will close on June 2, or earlier if oversubscribed.

This 10-year bond, which may be redeemed from the fifth anniversary onwards, includes a €50 million overallotment option in the event of high demand. It forms part of BOV’s broader efforts to bolster its capital base and support its growth strategy, following a strong response to the first tranche issued in November 2024.

The bonds are structured as Tier 2 instruments and include bail-in clauses. They are being offered at par, with interest paid annually. The issue is subject to regulatory suitability tests for retail investors and will be listed on the Malta Stock Exchange by mid-July.

Half of the €100 million issue will be allocated to existing shareholders, bondholders, and BOV Group employees. A further 35% is earmarked for professional and institutional investors, while the remaining 15% is reserved for the general public. Unclaimed portions in any category may be reallocated.

BOV Chairperson Gordon Cordina said the bank was pleased with the strong interest in its bond programme and noted that the new issue would “strengthen the Bank’s capital base and maintain a robust balance sheet.” CEO Kenneth Farrugia described the bond as a “critical instrument” in supporting the bank’s strategic initiatives, which include a proposed bonus share issue and a potential share buyback scheme still subject to regulatory approval.

Applications require a minimum subscription of €10,000, while institutional investors must commit at least €100,000. Further details, including the Base Prospectus and Final Terms, will be made available online from June 2.

The bank reminded prospective investors that the bond is not simple and may be difficult to understand, encouraging all applicants to review the full documentation and seek financial advice where necessary.