Estonia, Port, Transport

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Port of Tallinn to issue EUR 80 mln bond to finance ferry purchase

BC, Tallinn, 15.07.2016.Print version
The state-owned Estonian port company Port of Tallinn is about to issue bonds worth 80 mln euros in September to finance the acquisition of brand new ferries for island routes, and the entire issue will be subscribed for by Swedbank as investor, writes LETA/BNS.

Port of Tallinn and Swedbank have signed an agreement on the issuance of 10-year bonds in the amount of up to 80 mln euros. The issue will take place in September 2016 and Swedbank will subscribe for all the shares as investor, the port company said.

 

The money raised will be used by Port of Tallinn to partially finance the acquisition of brand new ferries. While so far the ferry project has been financed using short-term loans and the company's own cash flow, the borrowings will now be refinanced to become long-term debt. In total up to 124 mln euros of long-term capital is to be raised for the ferry project.

 

The port company's CFO, Marko Raid, described the bond issue as significant for the company because the last time the company concluded a 10-year financing agreement with a local bank was almost 10 years ago.

 

"Considering the rate of participation in the competition of financing offers in June and tight competition, we are glad to note that the local banking market's ability to offer long-term finance is returning to the pre-crisis levels," Raid said.

 

The bond issue is the biggest financing transaction for Port of Tallinn of all time. In 2017, the company is planning to refinance bonds in the amount of 105 mln euros when three previous bond issues mature in November that year.

 

The debt burden of Port of Tallinn is estimated to be 250 mln euros at the end of 2016.

 

In December 2015, Port of Tallinn issued 60 mln euros worth of two-year bonds through the Estonian branch of Pohjola Pank to finance the construction of ferries.

 






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