Nepal Bank To Float Debenture Worth Rs 3.50 Arba From Baisakh 22
May 5, 2021 | Investopaper
Nepal Bank Limited (NBL) is going to issue a debenture called ’10 Years, 8.5% Nepal Bank Rinpatra 2087′. The debenture issue will open from Baisakh 22, 2078 BS. Interested investors can apply for the debenture until Baisakh 26, 2078 BS. However, if the issue remains under-subscribed until that period, the deadline for application will extend to Jestha 5, 2078 BS.
After receiving the approval from Sebon, Nepal Bank will float 35 lakh units debenture. The par value of each unit of debenture is Rs 1,000. Hence, the total debenture issue is worth Rs 3.50 Arba. Out of the total issue, the bank will sell 21 lakh units debenture worth Rs. 2.10 Arba through private placement. Likewise, the general public can apply for the remaining 14 lakh units that amount to Rs. 1.4 Arba. Out of the public issue size of 14 lakh units, mutual funds will receive 5 percent or 70,000 units.
One can apply for a minimum of 25 units and a maximum of 3 lakh units.
The bank had submitted the application to Securities Board Of Nepal (SEBON) on Poush 19, 2077 BS for the issuance of debenture.
The debenture will provide a 8.5 percent interest per annum payable semi-annually. The maturity period is of 10 years. Hence, Nepal Bank will refund the principal amount in 2087 BS.
Nepal Bank has appointed Nabil Investment Banking Limited as the issue manager for the debenture.
With the fall in the interest rates at current financial market, the debenture issue is likely to attract attention. As interest on this debenture is higher than the interest rate on the fixed deposit, investors might consider purchasing the issue as the long term investment alternative.
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