AMMAN (JT) -- Arab Bank and its fully-owned subsidiary, Atlas Investment Group, announced Sunday the successful closing of the $40 million bond offering for Middle East Complex for Engineering, Electronics and Heavy Industries plc. (MEC).
Arab Bank Deputy Chairman and Chief Executive Officer Abdul Hamid Shoman said that this amortising dollar-denominated bond issue was the first of its kind in Jordan to offer investors a fixed rate on the dollar for a five-year period.
Around 13 per cent the issue was placed with individual investors, representing a significant shift towards more retail participation in local bond marketing.
"The issue also attracted exceptional demand from foreign banks, which subscribed for around 17 per cent of the issue," Shoman indicated.
Arab Bank acted as a partial underwriter, registrar, custodian and paying agent for the issue, while Atlas Investment Group acted as the sole lead manager.
The bond offering attracted a well-diversified investor base, including 24 institutional investors, led by Arab Bank, Housing Bank for Trade and Finance, Jordan Kuwait Bank, and National Bank of Kuwait.
$30 million of the bond proceeds will be used to refinance a large part of MEC's indebtedness, thus achieving a significant saving in the cost of finance as a result of fixing the interest rate at 6.00 per cent for the coming five years.
The Arab bank, one of the oldest and most prominent banking institutions in the region with total assets exceeding $25 billion, enjoys a global branch network of more than 400 branches in five continents.
Atlas, a member of the Arab Bank Group, is Jordan's first investment banking firm and is now among the region's leading firms offering integrated investment banking services including: Corporate finance, asset management, research and brokerage service.
Atlas/Arab Bank announced earlier this month the successful closure of another JD45 million step-up note issue for Jordan's leading tourism-investment company, Zara Investment (Holding).
MEC is a leading Jordanian company that manufactures and sells electric and electronic home appliances under international brand names most prominently LG, in addition to other MEC-owned brands.
MEC has emerged as the largest manufacturer of electric and electronic home appliances in Jordan, dominating more than 75 per cent of the local home appliances market.
MEC has successfully become one of the leading firms in its industry within the region, exporting to Iraq, Syria, Egypt, Lebanon, Libya, among others.
© Jordan Times 2004
