KUALA LUMPUR: EON Bank Bhd has completed its issuance of RM500 million Tier 2 subordinated medium term notes, its parent EON Capital Bhd said.

“The RM500 million subordinated MTN was issued under the RM2 billion subordinated MTN programme which was approved by the Securities Commission on Nov 19, 2008,” EON Cap said on Thursday, Dec 30.

The subordinated MTN, rated A2 by RAM Rating Services Bhd, has a maturity of 10 years and callable at the end of year five and on each subsequent coupon payment dates thereafter.

EON Cap said the redemption of the subordinated MTN on the call option dates shall be subject to Bank Negara’s approval.

The coupon rate is 4.75% p.a. and the coupon is payable semi-annually in arrears from the date of issue. The coupon rate of 4.75% per annum will remain unchanged throughout the tenure of the third tranche.

Its group chief executive officer Datuk Michael Lor said EON Cap was extremely pleased with the overwhelming response and bids from both institutional and private banking clients, which resulted in orders exceeding RM1.2 billion.

“Accordingly, we decided to upsize the issue from RM300 million to RM500 million,” he said.

The RM500 million subordinated MTN will further strengthen the EON Bank Group’s capital ratio.  The issue is also part of its capital management initiatives to ensure that it has the flexibility to tap into the capital markets for the Group’s continued expansion.

MIMB Investment Bank Bhd and AmInvestment Bank Bhd were the joint lead managers.