“10% Himalayan Bank Debenture 2083” opening for application; Things to know before investing

Wed, Jul 17, 2019 10:17 AM on Bonds & Debentures, Exclusive, Stock Market, Featured,

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Company profile

Himalayan Bank Limited (HBL) is a class A commercial bank incorporated under the Company Act 2063. It's registered head office is located at Kamaladi-31, Kathmandu. The bank is currently operating via a network of 58 branches around Nepal.

It was incorporated in joint venture with Habib Bank Limited of Pakistan and obtained license to operate "A" class commercial bank from NRB dated February 18, 1992. Total shareholding of the bank is divided between promoter group and general public in the ratio of 85:15.

HBL has been in operation since 2048 B.S., making it one of the oldest banks of the country. Likewise, it is in the process of establishing Himalayan Capital as its 100% subsidiary company.

About the issue

Himalayan Bank Limited (HBL) is set to open the issue of its “10% Himalayan Bank Debenture 2083”. HBL is issuing 30 lakh units debenture at par value of Rs.1000 each to raise debt worth Rs.3 Arba. The debentures will offer an interest rate of 10% p.a. and will mature in a period of 7 years.

The applications for the debenture issue is open from Shrawan 2, 2076. The early closing of the issue is on Shrawan 6, 2076. If the issue is not fully subscribed till the early closing, it can be extended up to Shrawan 31, 2076.

Laxmi Capital Market Limited has been appointed as the issue manager for the debenture issue.

Out of the total units, 1,200,000 units (40% of the issue) will be offered to the general public while remaining 1,800,000 units (60% of the issue) will be privately placed. Amongst the units offered to the general public, 5% i.e. 60,000 units have been reserved for mutual funds.

Applications can be placed for minimum 25 units while there is no maximum limit for the same.

CRNL has assigned the issuer rating of “CARE-NP A (Is)” to HBL. Issuers with this rating are considered to offer adequate degree of safety regarding timely servicing of financial obligations. Such issuers carry low credit risk.

CRNL has also assigned “CARE-NP A” rating to “10% Himalayan Bank Limited Bond 2083” issue of HBL worth Rs.3 Arba. The instruments with this rating are considered to have adequate degree of safety regarding timely servicing of financial obligations. Such instruments carry low credit risk.

HBL had previously issued “8% Himalayan Bank Debenture 2077” worth Rs.60 Crore.

Capital structure

Shareholding composition

Primary shareholders

Board of Directors

Management team

*The company has 839 employees in total.

CARE Nepal Rating

CRNL has assigned the issuer rating of “CARE-NP A (Is)” to Himalayan Bank Limited (HBL). Issuers with this rating are considered to offer adequate degree of safety regarding timely servicing of financial obligations, in Nepal. Such issuers carry low credit risk.

CRNL has also assigned “CARE-NP A” rating to the proposed Subordinated Debenture “10% Himalayan Bank Limited Bond 2083” issue of HBL. The instruments with this rating are considered to have adequate degree of safety regarding timely servicing of financial obligations, in Nepal. Such instruments carry low credit risk.

Key Rating Strength

Long track record backed by institutional promoters
Experienced directors and management team
Adequate capitalization level
Consistent growth in deposits and advances
Considerable growth in total income over the last 3 years, albeit decline in net profit and RoTA during FY18, however improved during H1FY19
Diversified loan portfolio with regulatory compliance
Comfortable CASA ratio although declining over the period
Comfortable liquidity profile

Key Rating Weaknesses