LHV Group issued bonds worth EUR 300 million


AS LHV Group issued senior unsecured bonds in the amount of EUR 300 million. The maturity of the bonds is 4 years, the issuer has the right to buy back the bonds 1 year before the maturity date.

The unsecured bonds were sold to institutional investors worldwide, including asset management companies, investment funds, insurance companies, supranational investors and banks. Nearly 140 investors participated in the offer, and the volume of purchase offers reached EUR 1.55 billion before the final yield was fixed. Of this, over third came from the United Kingdom, followed by investors from Germany, Central Europe, Austria, Switzerland, the Nordic countries, and the Baltic states. There were also buyers from other Western European countries, South Korea and elsewhere.

The bonds were issued with a yield of 5.375%, with a margin of 240 basis points above the base rate. The bonds will be redeemed on May 24, 2028, one year earlier the issuer has the right to buy back the bonds prematurely. The issued bonds are eligible liabilities in the sense of the MREL (Minimum Requirement for Own Funds and Eligible Liabilities) regulation.

"The issue is our largest bond issue on the international capital markets so far. The purpose of the issue is to meet regulatory requirements as well as to ensure the financing volumes necessary for customer financing – the regulations stipulate that banks must include part of their funding in the form of unsecured bonds. We started preparations for this transaction already half a year ago. The quantity and quality of the investors who participated in the offer reflects the success of the investor meetings held during this time,” commented Ülar Kiisla, Head of Funding at LHV.

The bonds will be listed on the Euronext Dublin stock exchange. The credit rating of LHV Group as an issuer of long-term debt obligations is Baa3 with a positive outlook (Moody's). The expected rating of the bonds is also Baa3. The credit rating of LHV Pank's deposits is A3 with a positive outlook (Moody's).

LHV Pank was one of the banks acting as joint lead managers for the issue.

LHV Group is the largest domestic financial group and capital provider in Estonia. LHV Group’s key subsidiaries are LHV Pank, LHV Varahaldus, LHV Kindlustus, and LHV Bank Limited. The Group employs over 1,100 people. As at the end of April, LHV’s banking services are being used by 432,000 clients, the pension funds managed by LHV have 120,000 active clients, and LHV Kindlustus protects a total of 167,000 clients. LHV Bank Limited, a subsidiary of the Group, holds a banking licence in the UK and provides banking services to international financial technology companies, as well as loans to small and medium-sized enterprises.

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