Luminor issues public senior unsecured bonds worth EUR 300 million
2019-06-14
On June 11, Luminor Bank AS issued 3-year and 4-month public senior unsecured preferred bonds under the European Medium Term Note (EMTN) Program worth EUR 300 million, to be listed on the Irish Stock Exchange.
According to Max Ehrengen, Luminor’s head of treasury, Luminor has taken yet another important step towards becoming a self-funded, independent, pan-Baltic bank. “I am glad to note that we attracted investors from across Europe, covering as many as 17 countries in total,” Ehrengen said.
During the first week of June, Luminor held close to 50 meetings with investors across Europe in the Baltics, the Nordic countries, the United Kingdom, Germany, France and Poland. Luminor Bank AS subsequently confirmed this transaction on June 11.
Investor appetite was very strong, generating orders in excess of EUR 600 million that enabled Luminor to issue bonds worth EUR 300 million at a spread over mid-swap of 167 bps, tightening pricing by 13 bps compared to initial pricing indications. Considering the low euro interest rates, the final coupon rate of the bonds was fixed at 1.375% and the yield ended at 1.42%. More than 80% of orders, worth nearly EUR 500 million, originated from outside of the Baltics.
“The scale of the investors’ interest proves that Luminor’s financial profile is strong and that Luminor as a credit institution is viewed as a solid and emerging investment case across a broad European investor universe,” Ehrengen remarked.
The bond carries a provisional senior unsecured Moody´s rating of Baa2.
The amount of outstanding bonds under the EMTN program now amounts to a total of EUR 650 million, with this transaction building on the inaugural transaction of EUR 350 million from October 2018.
Luminor has an EMTN program in the amount of EUR 3 billion, enabling it to issue bonds under standardized documentation. The program has two purposes: to replace funding from the current shareholders and to support and fund customer business.
