Nepal Investment Bank offers Rs 50 crore debentures at 8%

ShareSansar, June 30

Nepal Investment Bank will issue Rs 50 crore worth of debentures starting from July 8, 2013. The bank will pay 8 percent interest on the debentures with par value at Rs 1000 and a maturity period of 5 years.

Out of the total bonds issue, general public can apply only for Rs 10 crore bonds. The bank will sell the remaining Rs 40 crore debentures to institutional investors.

The bank has already issued Rs 1 arba 50 lakhs worth of debentures earlier.

NIB is issuing debentures as it needs additional capital to increase its lending capacity and expand business while maintaining its capital adequacy ratio at safe levels.   

Interested investors will have to apply for a minimum of 25 units. The bank has appointed Nabil Investment Banking Limited as sales and issue manager for the debentures.

The debentures can be used for taking out loans by keeping them at any bank or finance institution in future after it gets listed in the secondary market of Nepal. Once listed at NEPSE, it can also be traded at the local bourse.

Nepal Investment Bank Limited (NIBL) has got ICRA NP Issuer Rating of A, which indicates at the banks adequate-credit-quality Rating assigned by ICRA Nepal. The rated entity carries average credit risk. The Rating is only an opinion on the general creditworthiness of the rated entity and not specific to any particular debt instrument.

Currently, Prithvi Bahadur Pande, Chairman, NIBL, controls, directly and indirectly, 50% of the voting rights of the bank. Two Government institutions, namely Rastriya Banijya Bank and Rastriya Beema Sansthan, hold 15% equity stake each in NIBL, while the remaining 20% is held by the general public.

NIBL, one of the largest private sector banks in Nepal, has a good presence via 42 branches and 68 ATMs.

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