Enemalta Corporation has signed a €210 million 10 year loan facility, guaranteed by the Republic of Malta.

The loan was signed with Banco Efisa of Portugal and DEPFA BANK of Ireland (who acted as joint mandated lead arrangers), together with Sumitomo Mitsui Banking Corp of Japan. Interest rate on the loan is on a Euribor plus basis and described as “tightest pricing given the maturity”. Enemalta has also successfully negotiated facilities of €90 million with Bank of Valletta & HSBC locally. Proceeds of both loans will be used to refinance existing debt.

“Enemalta has been able to significantly reduce its interest costs with this new financing arrangement,” commented Enemalta chairman Alexander Tranter. “And this is of direct benefit to the Corporation,” he said. Interest savings are estimated at Lm 1.8 million per annum, partly due to borrowing in Euro but more significantly on margins.

Following a competitive bid between several international banks managed by the Corporation and supervised by the Central Bank of Malta, leadership of the facility was awarded to Banco Efisa of Portugal and DEPFA BANK of Ireland who acted as joint mandated lead arrangers, together with Sumitomo Mitsui Banking Corp of Japan.

“Enemalta has been able to take advantage of Malta’s EU membership to establish new banking relationships with European banks whilst continuing with its existing and long term relationship with Sumitomo,” said Ricardo Pedrosa of Banco Efisa. “We are pleased to assist Enemalta to raise capital from the Euro market to meet its investment re-financing needs,” he said.

The 10-year loan is the first Euro denominated transaction by a Maltese state-owned entity, and it achieved the tightest pricing given the maturity. “This sets a new benchmark for Maltese assets. It is further evidence of the trend towards tighter pricing throughout the new member states of the EU,” said DEPFA’s Tim Streeter. “The Corporation’s management under the leadership of ex-chairman Tancred Tabone has taken advantage of an excellent opportunity and SMBCE is delighted to be a part of the transaction. We are very proud of our 12 year association with the Corporation” added Mike Hobbs, deputy general manager of Sumitomo Mitsui Banking Corp in London.