LHV Group's New Tier 1 Subordinated Bonds Issued
Recently, AS LHV Group successfully issued a new batch of Tier 1 subordinated unsecured bonds valued at 50 million euros. This issuance marks a significant event in LHV's financial strategy, reflecting its robust position in international markets.
Details of the New Bonds
The bonds are structured to be in bearer form, available in denominations of EUR 200,000, with integral multiples available up to EUR 399,000. Notably, these new securities have no defined maturity date, making them perpetual instruments. The first call date is set for 30 April 2030, with an attractive annual coupon rate of 9.5%, planned to be issued at 100% of the nominal value.
Investment Community Participation
LHV Group has sought to bolster its additional Tier 1 capital by attracting a diverse set of investors. Various European investment funds and qualifying investors joined in the subscription of these bonds, with a significant share coming from British investors, who represented nearly half of the total subscription. Baltic investors contributed about 38% to the total volume, demonstrating a well-balanced interest across different regions.
Early Redemption of Existing Bonds
In conjunction with this new issuance, LHV Group announced an early redemption of its existing subordinated bonds issued in May. The specific bonds involved bear the ISIN code EE3300001668 and are known as AT1 Bonds. This early redemption aligns with the terms set out during their issuance, which allows full or partial early redemption following sufficient advance notice to investors and receiving approval from the financial supervisory authority.
Redemption Financials
All 150 AT1 bonds, which have a nominal value of 100,000 euros each, amounting to a total of 15 million euros, will be redeemed early. Bondholders can expect to receive their respective nominal values, along with any accrued and unpaid interest leading up to the redemption date. Notably, investors will receive EUR 102,375 for each bond redeemed. The scheduled redemption date for these AT1 Bonds is set for 26 May, with the bondholder list being recorded the day prior.
About LHV Group
LHV Group stands as Estonia's largest domestic financial organization and a key provider of capital. The Group’s subsidiaries include LHV Pank, LHV Varahaldus, LHV Kindlustus, and LHV Bank Limited, with a dedicated workforce of over 1,160 employees. As of late March, LHV’s banking services cater to approximately 465,000 clients, while their managed pension funds serve around 113,000 active subscribers. Additionally, LHV Kindlustus protects a clientele of 174,000 individuals. The Group also operates LHV Bank Limited in the United Kingdom, which delivers banking services to international fintech companies and offers loans to small and medium-sized enterprises.
Contact Information
For further inquiries, please reach out to:
Priit Rum
Communications Manager
Phone: +372 502 0786
Email: priit.rum@lhv.ee
Frequently Asked Questions
What are Tier 1 secured bonds?
Tier 1 subordinated bonds are a type of debt that institutions can issue to strengthen their capital base, often appealing to investors seeking stable returns.
Who participated in the subscription of LHV's new bonds?
A variety of European investment funds and qualifying investors, including a significant portion from British and Baltic participants, were involved in the bond subscription.
What are the terms for redeeming AT1 bonds?
The AT1 bonds can be redeemed early after the specified notice period and with consent from the financial supervisory authority.
How much will AT1 bondholders receive upon redemption?
Bondholders will receive EUR 102,375 per bond, which includes both the nominal value and any accrued interest up to the redemption date.
What is LHV Group's position in the financial sector?
LHV Group is the leading domestic financial entity in Estonia, supporting numerous clients with banking and investment services, as well as establishing a banking presence in the UK.
