KENANGA ANNUAL REPORT 2017

26. BORROWINGS Note Group Bank 2017 RM'000 2016 RM'000 2017 RM'000 2016 RM’000 Short term borrowings Secured: Revolving bank loan (a) 64,000 75,200 64,000 75,200 Unsecured: Revolving bank loans (b) 21,000 50,500 – – Medium term notes (c) – 40,000 – 40,000 Subordinated notes (d) 5,000 – 5,000 – 90,000 165,700 69,000 115,200 (a) The revolving bank loan amounting to RM64 million bears interest of 0.5% per annum above cost of funds. The loan is secured by a first party legal charge over Kenanga Tower, the corporate office building of Kenanga Investment Bank Berhad. The tenure for the loan is 7 years. (b) The revolving bank loans bear interest of 1.50% to 2.50% over cost of fund (2016: 1.50% to 2.00% over cost of fund) plus cost of maintaining statutory reserve and liquidity requirements and is payable on maturity of the loans. The maximum tenure for the loans is 3 months (2016: 6 months). (c) On 13 August 2014, KNKH established a RM200 million Commercial Paper/Medium Term Notes Programme (“CP/MTN Programme”) in nominal value of up to seven (7) years tenure. Pursuant to the Group Internal Reorganisation, the CP/ MTN Programme has been transfered to KIBB. KIBB may from time to time issue debt under the Programme subject to availability of funds from the market. The Bank has fully redeemed the outstanding MTN during the year. (d) On 20 April 2017, the Bank issued the first issuance of RM5 million Subordinated Notes under the RM250 million in nominal value Tier 2 Subordinated Note Programme which was established on 27 March 2017. The Subordinated Notes will pay a coupon of 6.25% per annum. The Subordinated Notes has a tenure of 10 years Non-Callable 5 years from the issue date and will mature on 20 April 2027 and call date 20 April 2022. The proceeds from the issuance of the Subordinated Notes will be utilised by the Bank for working capital requirement. Kenanga Investment Bank Berhad 31 December 2017 150 notes to the financial statements