Bigbank AS Achieves Milestone with Unsecured Bond Offering
The public offering of Bigbank AS (Bigbank) unsecured subordinated bonds, known as the Offering, has concluded recently. This initiative marked the third series under Bigbank's unsecured subordinated bond programme, allowing the bank to raise a total of up to 30 million euros.
Details of the Offering
Bigbank offered up to 3,000 unsecured subordinated bonds, each carrying a nominal value of EUR 1,000. These bonds are set to mature on 23 October 2034, featuring a fixed interest rate of 6.5% per annum, with payments made quarterly. Remarkably, in light of investor demand, Bigbank retained the option to increase the offering volume by an additional 5,000 bonds, potentially raising the total to 8,000 bonds. Notably, this Offering was conducted across Estonia, Latvia, and Lithuania.
Investor Participation and Allocation
A total of 789 investors engaged in the subscription process, placing orders for the subordinated bonds that collectively amounted to 8.7 million euros. This remarkable interest indicated that the base issue volume of 3 million euros was oversubscribed by nearly three times. Consequently, Bigbank decided to exercise its right to expand the Offering, ultimately setting the total volume at 5 million euros.
Allocation Principles for Investors
The Management Board of Bigbank laid out clear principles for bond allocation:
- All subscription orders from the same subscriber were aggregated.
- Subscriptions from investors up to 30,000 euros were fully accepted.
- Employees from companies within the Bigbank group were allocated 100% of their subscribed amount.
- Investors were granted 2.75% of their subscription exceeding 30,000 euros.
- The number of bonds allocated was rounded to the nearest whole number where applicable.
Statements from the Management
In a statement, Martin Länts, Chairman of the Management Board at Bigbank, expressed gratitude towards all participating investors for their trust in the bank's growth strategy. He noted, "The subscription results underscore the unwavering confidence of investors in Bigbank's future and its strategic direction. However, the offered interest rate might have been perceived as a tad high due to recent fluctuations in the interest rate environment. The capital acquired will substantially bolster Bigbank's capacity to implement its business strategy, primarily focusing on expansion in the housing and corporate loan sectors, while adhering to regulatory capital requirements."
Upcoming Trading Expectations
Investors can anticipate that the bonds will be transferred to their respective securities accounts around 23 October. The first trading day for these bonds on the Baltic Bonds List of Nasdaq Tallinn Stock Exchange is expected to commence on or about 24 October.
About Bigbank AS
Bigbank AS, established over 30 years ago, is a commercial bank with Estonian ownership. As of the latest reports, the bank's total assets were valued at 2.6 billion euros, with an equity amounting to 252.8 million euros. The bank operates in nine countries, catering to more than 150,000 active customers and employing over 500 personnel. Moody's, the credit rating agency, has assigned Bigbank a Ba1 long-term deposit rating along with a baseline credit assessment (BCA) and an adjusted BCA of Ba2.
For more information, you can reach Argo Kiltsmann, a member of the Management Board, via phone at +372 53 930 833 or email at Argo.Kiltsmann@bigbank.ee. For additional details, visit www.bigbank.ee.
Frequently Asked Questions
What is the total amount Bigbank AS aimed to raise?
Bigbank AS aimed to raise up to 30 million euros through its bond offering.
How many investors participated in the Offering?
A total of 789 investors participated in the subscription for the subordinated bonds.
What was the nominal value of each bond in the Offering?
Each bond offered had a nominal value of EUR 1,000.
What was the interest rate for the subordinated bonds?
The bonds carried a fixed interest rate of 6.5% per annum, payable quarterly.
When can investors expect to trade the bonds?
Investors can expect the bonds to start trading on or around 24 October.
