KUALA LUMPUR (Sept 12): Public Bank Bhd (PBB) has obtained approval from Bank Negara Malaysia (BNM) for the establishment of a subordinated medium term notes (sub-notes) programme of up to RM20 billion in nominal value.

In a filing with Bursa Malaysia on Tuesday, the third largest bank in the country in terms of total assets said the programme will have a tenure of 30 years from the date of the first issuance of the sub-notes.

The sub-notes programme will provide PBB with the flexibility to issue sub-notes from time to time.

The bank, via its subsidiary Public Investment Bank Bhd (PIVB), have lodged with the Securities Commission Malaysia (SC), the required information and relevant documents to establish the programme.

The sub-notes will qualify as Tier 2 capital for the computation of the regulatory capital of PBB and PBB Group, in accordance with the Capital Adequacy Framework (Capital Components) issued by BNM.

RAM Rating Services Bhd has assigned a long-term rating of AA1 to the sub-notes programme.

PIVB has been appointed as the Principal Adviser/Lead Arranger/Lead Manager for the arrangement.

PBB shares closed unchanged at RM4.24 on Tuesday, valuing the bank at RM81.91 billion.