March 25, 2021 | Investopaper
Prime Commercial Bank Limited (PCBL) is currently issuing a debenture named “8 years, 8.75% Prime Debenture 2085“. The debenture issue is open from Falgun 28, 2077 BS. The bank was going to close the debenture offering on Chaitra 2, 2077 BS. However, due to undersubscription until that period, it will now extend to Chaitra 12, 2077 BS.
Previously, Prime Commercial Bank had planned to open the debenture issue from Falgun 19, 2077 BS. However, due to some technical problem, the date for the debenture offering has been changed.
Securities Board Of Nepal (SEBON) had provided the approval to the bank on Poush 26, 2077 BS for the issuance of the debenture. The bank had submitted the application to SEBON on Karthik 14, 2077 BS.
Prime Commercial 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 1.4 lakh units, mutual funds will receive 5 percent or 70,000 units.
Interested Investors can apply for a minimum of 25 units and a maximum of 5 lakh units of the debenture.
The debenture will provide an 8.5 percent interest per annum payable semi-annually. The maturity period is of 8 years. Hence, the bank will refund the principal amount in 2085 BS.
RBB Merchant Banking Limited is the issue manager for Prime Debenture 2085.
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.