Luminor issues bonds worth EUR 300 million

“Luminor Bank” has concluded the issue of unsecured bonds in the amount of 300 million euros with a three-year term, the bank’s representatives said.

The transaction, which was completed on January 10, is implemented in accordance with the growth strategy of “Luminor Bank”, will strengthen the bank’s compliance with the minimum requirements of own capital and eligible liabilities (MREL), as well as improve the liability structure, bank representatives emphasize.

This year, on January 9, representatives of “Luminor Bank” met virtually with investors from all over the world and, after receiving positive feedback, on January 10, they issued bonds. Purchase orders received from more than 90 investors across Europe. The demand of investors from Great Britain made up almost half of the total volume of orders, there was also great interest from investors in the German-speaking part of Europe and the Baltic States.

The bank notes that the price of the security was 25 basis points better compared to the initial indicative price. The security’s yield was set at 7.25%, while investors were initially quoted a rate of 7.5%.

Palle Nordāls, financial director of “Luminor Bank”, states that by issuing the latest priority bonds, it has been possible to reopen the market for borrowers from the Baltic countries. Investors’ interest shows the stability of “Luminor Bank”, and this issue will allow to provide wider support opportunities for clients, while expanding operations in Latvia, Lithuania and Estonia.

The bonds, which the issuer has the right to repurchase one year before the maturity date and rated by the rating agency “Moody’s” with a “Baa1” rating, are listed on the Irish Stock Exchange and were issued under Luminor Bank’s European Medium Term Note (EMTN) program and Covered Bond program. One of the organizers of the transaction in this transaction was the Financial Market Department of “Luminor Bank” (“Luminor Markets”).

Luminor Bank is the fourth largest bank in Latvia in terms of assets. In October 2017, “Nordea Bank” and DNB’s combined bank “Luminor Bank” started working in the Baltic States, while at the beginning of January 2019, the cross-border merger of “Luminor Bank” operating in the Baltic States was completed, with the bank continuing to operate with the central office in Estonia and branches in Latvia and in Lithuania. The bank’s strategic investor is the US investment company “Blackstone”.