Luminor issues EUR 350 million in inaugural public EMTN* senior unsecured bonds
On 10 October Luminor Estonia issued a EUR 350 million senior unsecured inaugural bond with a maturity of three years under the newly established EMTN Programme and listed it on the Irish stock exchange.
In recent weeks Luminor has had several meetings with investors from the Baltics as well as the Nordics, the UK, Germany, France and Poland. On the back of these meetings, Luminor Bank AS announced a three-year transaction on 10 October.
Investor appetite was strong, generating interest in excess of EUR 400 million, which enabled Luminor to issue EUR 350 million 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.
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 centralised bank under Estonia with Latvia and Lithuania as branches starting from January 2019.
“Being able to issue an inaugural public benchmark bond in the amount of EUR 350 million is a show of strength, attracting more than 40 investors across Europe,” said Erkki Raasuke, Luminor Group CEO.
The scale of the investment proves that Luminor’s financial profile is strong and that Luminor as a credit institution is an intriguing investment case for both Baltic and international investors. The issuing of bonds will also have a positive effect on Estonia and Baltic capital markets overall.
According to Max Ehrengren, Luminor Head of Treasury & ALM, Luminor has now taken an important step towards becoming a self-funded, independent, pan-Baltic bank.
*Luminor recently established an European Medium Term Note (EMTN) programme in the amount of EUR 3 billion, enabling it to issue bonds under standardised documentation. The programme has two purposes: to replace funding from the owner banks; and to support and fund customer business.