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International Internet Magazine. Baltic States news & analytics Friday, 29.03.2024, 07:55

EBRD to buy EUR 150 mln worth of Luminor bonds

BC, Tallinn, 18.10.2018.Print version
The European Bank for Reconstruction and Development (EBRD) is to invest up to 150 million euros in a series of senior bonds issued by Luminor Estonia under its European Medium Term Note (EMTN) program in order to support the bank in its efforts to become a self-funded and independent pan-Baltic financial institution, informed LETA/BNS.

An initial investment of 60 mln euros was committed during a first 350 mln euro public issuance, for which Citi, Goldman Sachs, JP Morgan and Nordea were the bookrunners, EBRD said.


As a result of several meetings with investors from the Baltics as well as the Nordics, the U.K., Germany, France and Poland, Luminor Bank on October 10 carried out a successful bond issue. Luminor said that investor appetite was strong, generating interest in excess of 400 mln euros, which enabled the bank to issue 350 mln euros in bonds. 


The investors came from the Baltics and across Europe, covering 14 countries in total. The bond carries a provisional senior unsecured Moody's rating of Baa2.

"Being able to issue an inaugural public benchmark bond in the amount of 350 mln euros is a show of strength, attracting more than 40 investors across Europe," Erkki Raasuke, Luminor Group CEO, said.


The bond issue is part of Luminor's strategy to replace the financing of parent banks with a stable funding from financial markets and also gradually grow its deposit portfolio. "Luminor is undoubtedly one of the most interesting investment objects in the Baltics," Raasuke added.


According to Max Ehrengren, head of treasury and asset liability management at Luminor, the bank has now taken an important step towards becoming a self-funded, independent, pan-Baltic bank.


The bond was issued by Luminor Bank Estonia, taking into account both the upcoming change in its ownership structure and Luminor's cross-border merger to become one centralized bank under Estonia with Latvia and Lithuania as branches starting from January 2019.


The EBRD has been working in the Baltic states since 1991 and to date has invested some 2 bln euros in more than 250 projects in Estonia, Latvia and Lithuania. Strengthening private enterprises and developing the capital market are among the bank’s priorities in these countries.







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