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| Tiernan O'Mahoney |
International Securities Trading Corporation (ISTC), which was founded by former Anglo Irish Bank COO Tiarnan O'Mahoney, and is a lender of capital to financial institutions, today announced a substantial addition to its capital base through a €150 million, 5 year convertible subordinated bond issue.
The bond is convertible into ISTC ordinary shares at an equivalent price of €110 per share. The issue is in principle fully underwritten by Sevenca Limited, an entity which is controlled by Dermot Desmond.
The bond, which is paying a 9% coupon, is being offered to existing ordinary shareholders of ISTC as well as new investors. To the extent that the bond issue is oversubscribed, priority allocation will be given to shareholders of ISTC, pro rata to their equity holding. This ensures that all existing shareholders have the opportunity to maintain their current percentage shareholding in the company.
The margins available to ISTC through providing funding to its targeted OECD bank market have improved considerably following the events of recent months and the consequential repricing of all credit risk. This subordinated bond issue places ISTC in a strong position to take advantage of these positive market changes as its loan portfolio grows over the next two years. The opportunity to conclude the transaction with Dermot Desmond’s underwriting support is in line with ISTC’s long term stated strategy of adding to the company’s capital base, by taking advantage of opportunities when capital is made available to it.
The financial markets have been volatile and uncertain over the past three months and the raising of this capital will further serve to underpin ISTC’s position with regard to existing business including amongst other criteria, liquidity and capital adequacy, whilst at the same time further protecting ISTC against any future unforeseen shocks in the marketplace.
Commenting on the transaction, Tiarnan O Mahoney, Chief Executive ISTC said “Our business model has proven to be robust since the inception of the business and particularly through the unprecedented adverse market conditions of the past three months. The re-pricing of credit risk now presents us with the opportunity to further enhance our business prospects and to continue to grow profitability. The convertible bond transaction gives us the additional fire power to exploit this opportunity, whilst at the same time strengthening ISTC in terms of liquidity and capital adequacy, further protecting the company against any future unforeseeable shocks in the capital markets.”
The terms of the bond issue are as follows:
Amount: €150 million
Listing: Cayman Islands Stock Exchange
Coupon: 9%. 5% payable annually in arrears with a further 4% per annum payable at redemption /conversion
Conversion Convertible at any time up to 31st January 2013 into ISTC “A” Ordinary shares at a conversion price equivalent to €110 per share
Redemption 31st January 2013.
The Company expects that the related documentation will be finalised and the offering formally launched early next week. The subscription period for shareholders and selected investors will end on 23rd November 2007. An information memorandum setting out the details of the bond and how to apply will be sent to existing shareholders of ISTC in the coming days. An information memorandum can also be obtained by contacting David Kearney at Goodbody Corporate Finance, Ballsbridge Park, Ballsbridge, Dublin 4 +353 (0) 1 667 0420. The minimum subscription per investor for the bond will be €50,000.
