LHV Group Announces New Subordinated Bonds Offering
AS LHV Group (LHV) has exciting news for investors as it prepares to launch a public offering for subordinated bonds. This announcement is based on a prospectus that has received approval from the relevant Estonian authorities, indicating a solid foundation for the offering. The bonds will be available in Estonia, Latvia, and Lithuania, signaling LHV's commitment to expanding its reach and ensuring diverse investment opportunities.
Key Details of the Offering
This marks the second issuance of subordinated bonds by LHV Group, aiming to raise a maximum of EUR 20 million. The ongoing bond programme initially confirmed in the previous year allows the company to issue up to EUR 200 million in subordinated bonds overall. Previously, EUR 35 million has been raised under this programme, showcasing LHV's proactive approach in capital management.
Main Terms of the Subordinated Bonds
The new offering includes up to 20,000 subordinated bonds titled “EUR 6.00 LHV Group subordinated bond 24-2034”. Each bond carries a nominal value of EUR 1,000, with an attractive maturity date of 15 November 2034. Investors will benefit from a fixed interest payment made quarterly, set at an annual rate of 6%. All bonds will be available at an issuance price of EUR 1,000 each, issued in a dematerialised book-entry format, ensuring seamless transactions through Nasdaq CSD SE with the ISIN code EE3300004993.
Subscription Timeline
The subscription phase for these bonds will commence on 29 October 2024, starting from 10:00. It will conclude on 12 November 2024, ending at 16:00. This offering will cater to both retail and institutional investors, enabling access for clients of financial institutions that participate in the Estonian securities settlement system. LHV is keen to ensure that a wide range of investors can participate in this attractive opportunity.
Understanding the Nature of Subordinated Bonds
Investing in subordinated bonds implies accepting certain risks. These bonds represent an unsecured debt obligation, meaning they will only be paid after all unsubordinated debts are settled in the event of liquidation or bankruptcy. Investors should be aware of potential risks associated with these bonds, including the 'bail-in' risk, which pertains to the conversion of liabilities in certain scenarios. It's crucial for potential investors to familiarize themselves with these risks.
What are the Key Dates?
The timeline for this offering is critical and includes specific milestones such as:
- Start of Subscription Period: 29 October 2024 at 10:00
- End of Subscription Period: 12 November 2024 at 16:00
- Allocation Results Disclosure: Around 13 November 2024
- Bond Transfer to Investors: Approximately 15 November 2024
- Expected Listing Date: On or about 18 November 2024 on the Nasdaq Tallinn Stock Exchange
How to Subscribe to the Bonds
If you're interested in subscribing to LHV’s subordinated bonds, you will need to submit a subscription undertaking to your custodian bank during the specified subscription period. This must align with the custodian's processes and the conditions outlined in the prospectus. You can submit your undertaking using various methods provided by your financial institution, including online options or in-person visits.
Commitment to Listing and Trading
LHV intends to apply for the listing and admission of its subordinated bonds to trading on the Nasdaq Tallinn Stock Exchange, aiming for a listing around 18 November 2024. However, while there is a strong commitment to ensuring that these bonds will be listed, LHV stresses that it cannot guarantee the outcome. This careful approach reflects LHV’s dedication to transparency and investor protection.
Access to the Prospectus and Additional Information
For potential investors, the comprehensive prospectus detailing the terms of the offering is readily available on LHV’s official website and through the relevant regulatory authority's platforms. Interested parties are encouraged to review the full prospectus to ensure they understand the offering's conditions and implications before making investment decisions.
About LHV Group
LHV Group stands as Estonia’s predominant financial group, operating with multiple subsidiaries including LHV Pank, LHV Varahaldus, LHV Kindlustus, and LHV Bank Limited. With nearly 1,200 employees, LHV provides banking services to an impressive clientele of over 445,000 individuals. The pension funds managed by LHV cater to 116,000 active clients, while LHV Kindlustus serves 169,000 clients, showcasing the group's significant reach and robust economic standing.
Frequently Asked Questions
What are subordinated bonds?
Subordinated bonds are a type of unsecured debt that ranks lower than other loans or debts in terms of claims on assets. They carry higher risks and potentially higher returns.
When is the subscription period for the new bonds?
The subscription period starts on 29 October 2024 and ends on 12 November 2024.
What is the nominal value of the new bonds?
Each subordinated bond has a nominal value of EUR 1,000.
What interest rate will investors receive?
Investors will receive a fixed interest rate of 6% per annum, paid quarterly.
Where can I access the prospectus for the bonds?
The prospectus can be found on LHV’s website and through the relevant regulatory authority’s website.
