KUALA LUMPUR (July 25): Public Bank Bhd (PBB) (KL:PBBANK) on Thursday issued the second tranche of subordinated notes (sub-notes) amounting to RM1.5 billion under its RM20 billion note programme.
In a bourse filing, the country's third-largest bank in terms of total assets said the sub-notes have a tenure of 10 years with a five-year non-callable period, and a coupon rate of 4% per annum.
The bank said the proceeds from the RM1.5 billion notes issuance will be used for its working capital and general banking purposes.
The issuance, it added, will not impact PBB's share capital, substantial shareholders' holdings, earnings, net assets or dividend rate.
PBB had obtained approval from Bank Negara Malaysia (BNM) in September last year to establish the medium-term sub-notes programme of up to RM20 billion in nominal value.
The programme has a tenure of 30 years from the date of the first issuance. The first tranche of sub-notes worth RM1 billion was issued on Oct 25 last year, carrying a 4.27% coupon rate per annum and a 10-year tenure.
PBB said the sub-notes will qualify as Tier 2 capital for the computation of the regulatory capital of the 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.
PBB shares gained three sen or 0.72% to close at RM4.21 on Thursday, giving the group a market capitalization of RM81.72 billion.