KUALA LUMPUR (June 11): Kenanga Investment Bank Bhd (KL:KENANGA) is setting up an Additional Tier 1 Capital Securities (AT1CS) programme with a nominal value of up to RM500 million.

In a bourse filing, Kenanga said the funds raised from the AT1CS programme will be used for the company's capital expenditure, working capital needs, refinancing or settling existing financing or debt, and other general corporate purposes.

Kenanga said the AT1CS programme offers the company flexibility to issue AT1CS periodically. "Each issuance under the programme shall have a perpetual tenure and may be subject to the company call option, exercisable (in whole or in part) on the relevant call date," it noted.

"Any such exercise of the call option shall be subject to the prior written approval of Bank Negara Malaysia and the satisfaction of all applicable conditions set out in the terms and conditions of the AT1CS," it added.

Kenanga also confirmed that AT1CS issued under this programme will qualify as Additional Tier 1 Capital for the company, in line with the Capital Adequacy Framework set by the central bank. These securities can be rated or unrated, or a mix of both, and will be transferable and tradable after their issuance.

Kenanga, acting as its own principal adviser and lead arranger, has lodged the necessary documents with the Securities Commission Malaysia to establish the AT1CS programme. 

Kenanga's share price closed unchanged at 87 sen on Wednesday, giving the group a market capitalisation of RM640 million. Over the past year, the stock has fallen 26%.

Note: The article has been amended for accuracy.