A group of local, regional and international banks and financial institutions, led by National Bank of Bahrain and Securities and Investment Company BSC (Sico), have subscribed to the first bond issue of Esterad Investment Company BSC for a value of 25 million.
In addition to NBB and Sico, the lead managers of the bond issue, other institutions subscribing to the facility are: Gulf International Bank, Arab Banking Corporation, The Arab Investment Co., National Bank of Dubai ,Bank of Bahrain & Kuwait, and Arab Bank.
The formal signing of the subscription documentation, which was attended by representatives of Esterad, the participating banks and institutions, legal counsel Qays H. Zubi and registrar KPMG Fahkro, was held on July 19 at a local hotel.
The bond issue was made on a private placement basis in Bahrain and other GCC countries. The bonds, in denominations of 100,000 each, carry a tenor of five years from their date of issue and will pay 1.25 per cent above the London Inter-Bank Offering Rate for six months US dollar deposits (LIBOR), subject to a minimum coupon of 3.0 per cent per annum. Interest will accrue on the bonds from their date of issue in July 2005 with the interest payments scheduled every six months.
Esterad Investment Co. BSC (formerly National Imports & Exports Company BSC) is the only investment company listed on the Bahrain Stock Exchange. Esterad has a 30-year trading history and the shareholders' equity is currently over 135 million distributed amongst 4,400 shareholders. Major shareholders include the National Bank of Bahrain (10.05 per cent) and the Pension Fund Commission, Bahrain (18.04 per cent). The company has been assigned a long-term credit rating of BBB and a short-term credit rating of A2 by Capital Intelligence Ltd.
Esterad has undergone significant changes over the past few years commencing with a shift of focus to investments in preference to trading in commodities. In recognition of the change in its core activity, the company's policies and procedures were upgraded culminating in 2003 with a major restructuring of the management team.
Esterad strengthened its top management by appointing a new CEO with specialised experience in regional and international investment management and research, along with a team of highly talented investment professionals. The additional human resources now complement the capabilities and experience of the longer serving managers, creating the necessary breadth and depth in management resources and experience which will enable the company to achieve greater earnings stability and future growth.