Prime Commercial Bank to Launch NPR 3 Billion Debenture Offering

Prime Commercial Bank Limited, a prominent financial institution in Nepal, has announced its plan to issue and sell debentures worth NPR 3 billion. This significant offering, named '6.25% Prime Bank Debenture 2093', is set to open for public subscription from Ashar 16, 2081 (corresponding to July 1, 2024). This move by the bank aims to bolster its capital base and diversify its funding sources, providing a compelling investment opportunity for individuals and institutional investors alike.

The debentures come with an attractive annual interest rate of 6.25% and a maturity period of 10 years, making them a suitable option for investors seeking stable, long-term returns. Each debenture unit holds a face value of NPR 1,000. The total issue comprises 3 million units, with a strategic allocation designed to cater to both private and public investors.

Out of the total NPR 3 billion offering, 60% (equivalent to 1.8 million units or NPR 1.8 billion) has been earmarked for private placement. The remaining 40% (1.2 million units or NPR 1.2 billion) will be made available to the general public. Furthermore, demonstrating its commitment to broader market participation, 5% of the general public's quota, amounting to 60,000 units, has been specifically reserved for collective investment schemes (CIS). This allocation ensures that mutual funds and other pooled investment vehicles can also participate, potentially benefiting a wider array of small investors through their portfolios.

Investors interested in subscribing to these debentures can apply for a minimum of 25 units, translating to an investment of NPR 25,000. There is no upper limit for the maximum application, allowing investors to subscribe for all available units if they choose. The subscription period is scheduled to commence on Ashar 16, 2081. The earliest closing date for the issue is Ashar 19, 2081 (July 4, 2024), while the latest closing date is set for Ashar 30, 2081 (July 15, 2024). Prospective investors are advised to submit their applications promptly to avoid missing out on this opportunity.

Sanima Capital Limited has been appointed as the issue manager and sales manager for this debenture offering, ensuring a smooth and efficient application process. Investors can conveniently apply through the C-ASBA system, utilizing the 'Mero Share' online platform developed by CDS and Clearing Limited, or by visiting any of the C-ASBA participating banks and financial institutions and their designated branch offices approved by the Nepal Securities Board.

Crucially, the debenture issuance has received a 'CareNP Single A Minus Issuer Rating A' from Care Ratings Nepal. This rating signifies a high level of safety regarding the timely fulfillment of financial obligations, indicating a very low credit risk for investors. Such a strong rating provides considerable assurance to potential subscribers about the bank's financial health and its capacity to honor its commitments, including the semi-annual interest payments (after tax deduction) and the principal repayment upon maturity. This robust credit assessment makes the '6.25% Prime Bank Debenture 2093' an attractive proposition for investors prioritizing security and consistent income in their portfolios.

This debenture issuance by Prime Commercial Bank is a strategic move to strengthen its financial position, support its growth initiatives, and meet regulatory capital requirements. For investors, it represents a valuable opportunity to diversify their holdings with a fixed-income instrument from a reputable bank, offering competitive returns with a high degree of safety in the current market environment. The offering is expected to garner significant interest from both retail and institutional investors looking for reliable investment avenues in the Nepali financial market.