May 20, 2021 | Investopaper
NMB Bank Limited (NMB) is currently issuing a debenture named “8.5%, 10 years, NMB Rinpatra 2087/88“. The debenture offering is open from Jestha 2, 2078 BS. Due to over-subscription, the interested investors can apply for the purchase of debenture until Jestha 6, 2078 BS. If the issue had remained under-subscribed until that period, the deadline for application would extend to Jestha 16, 2078 BS.
Securities Board Of Nepal (SEBON) had provided the final approval for the debenture issuance on Baisakh 5, 2078 BS.
NMB Bank is floating 20 lakh units debenture. The par value of each unit of debenture is Rs 1,000. Hence, the total debenture issue is worth Rs 2 Arba. Out of the total issue, the bank will sell 12 lakh units debenture worth Rs. 1.2 Arba through private placement. Likewise, the general public can apply for the remaining 8 lakh units that amount to Rs. 80 crores. Out of the public issue size of 8 lakh units, mutual funds will receive 5 percent or 40,000 units.
The debenture will provide an 8.5 percent interest per annum payable semi-annually. The maturity period is of 10 years. Hence, the bank will refund the principal amount in 2087 BS.
Siddhartha Capital Limited is the issue manager for the debenture.
ICRA Nepal Limited has provided “[ICRA-IR] A-“ratings to the debenture. This indicates adequate degree of safety regarding the timely servicing of financial obligations.
One can apply for the minimum of 25 units and a maximum of 8,00,000 units.
With the fall in the interest rates at the 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.