Prabhu Bank Debenture Issue Closing From Today

August 7, 2020 | Investopaper

Prabhu Bank Limited is issuing debenture named “10% Prabhu Bank Debenture 2084” worth Rs. 2 Arba. The debenture issue was open from Shrawan 19, 2077 to Shrawan 23, 2077. If it remains under-subscribed until that period, the issue will extend to Bhadra 1, 2076.

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Securities Board of Nepal (SEBON) provided approval for debenture issue on Ashad 31, 2077.  The bank had submitted an application to Sebon on Magh 22, 2076.

Debenture Issue

Prabhu Bank will  float 20 lakh units debenture. The par value of each unit of debenture is Rs 1,000. Out of the total issue, the bank will sell 12 lakh units debenture worth Rs. 1.20 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.

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The debenture will provide a 10 percent interest per annum payable semi-annually. The maturity period is of 8 years. Hence, the bank will refund the principal amount in 2084.

Nabil Investment Banking Limited is the issue manager for the Prabhu Bank Debenture 2084.

Care Ratings Nepal has provided ‘CARE-NP BBB[Triple B]’ rating to the debeneture issue. Similarly, ICRA Nepal Limited also provided  ‘[ICRANP -IR] BBB’ ratings to the issue. Both the ratings indicates Moderate Credit Risk.

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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 quite 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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