Luminor Bank has launched its first bonds in Estonia. The investments have been made by LHV pension funds in amount of 35 million Euros and by Swedbank pension funds in 30 million Euros. The funds will be for the ordinary course of business and will replace the funding provided by Luminor`s shareholder banks.

Luminor Bank AS has entered the local Baltic capital markets in the first quarter after its launch of operations on 1 October 2017. Currently, Luminor is funded primarily by retail customer deposits, corporate customer deposits and by funding from the shareholder banks. The long-term funding strategy of Luminor is to attract additional customer deposits and to issue stable medium- and long-term wholesale funding to gradually replace the remaining funding from the owners.

“We are pleased to be able to report our first debt issuance this early in Luminor’s development,“ said Erkki Raasuke, CEO of Luminor Group AB „Our co-operation with LHV and Swedbank pension fund managers has been smooth and professional. It`s a promising start for us, and we intend to be regularly issuing wholesale funding across the Baltic markets.”

The latest investment in Luminor bonds is the second time LHV offers capital to local banks this year. Fund manager of LHV pension funds, Andres Viisemann commented: "We are convinced that this investment will bring benefits to all participants. Together we were creating a longer term debt instrument that is suitable for banks in financing lending activities. At the same time pension fund clients earn returns superior to short term deposit rates. I see this investment as one small step in the long process of developing Estonian capital markets.”

According to Kristjan Tamla, CEO of the Swedbank Investeerimisfonid AS, it is the first time when a combined financing offer of pension funds has been successful in Estonia.
“In Scandinavia pension funds often finance larger projects jointly and Luminor’s bond issue shows that such practice is also developing here. Furthermore, this is a good example how local investors can provide capital to a company before it gets financing recognition from foreign investors,” said Kristjan.

More information:
Max Ehrengren
Head of Treasury & ALM
+46 730 818960, Max.Ehrengren@luminorgroup.com

Hedwig Meidra
Corporate communication manager
+372 504 9104, Hedwig.Meidra@luminorgroup.com

LHV Group is the largest local financial group and capital provider in Estonia. The main subsidiaries of the LHV Group are LHV Pank and LHV Varahaldus. LHV employs over 350 people and its banking services are used by over 131,000 clients. The pension funds managed by LHV have 178,000 clients. The volumes of the pension funds managed by LHV Varahaldus as at the end of November amounted to 1,063 billion euros. According to data from the Estonian Chamber of Commerce and Industry, LHV’s active pension funds are the biggest investors in Estonia’s economy, accounting for 82.65% of all investments (Q3 2017).

Swedbank Investeerimisfondid AS is Estonian first and the biggest asset management company established in 1994 and is engaged in management of pension funds, investment funds and institutional porftolios. As end of November 2017 assets under management in pension funds reach 1.6 billion euros and number of clients is close to 350 000.

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