Bigbank issues new unsecured subordinated bonds with 6.5 percent interest rate and intends to list them on Nasdaq Tallinn Stock Exchange
Bigbank, rapidly growing provider of home and business loans in Estonia, Latvia, and Lithuania, announced today a new public offering of bonds with the total volume of 3 to 8 million euros. Investors can subscribe to Bigbank’s ten-year unsecured subordinated bonds with the annual interest rate of 6,5 percent, payable quarterly. The subscription period starts today and ends on 18 October. Bigbank intends to list the bonds on the Baltic Bond List of the Nasdaq Tallinn Stock Exchange to secure liquidity and free trading.
"Bigbank continues stable growth in both home and business loans and gradually starts offering everyday banking services as well. The current bond offering is the third in our 30-million-euro bond program the goal of which is to strengthen and optimise the capital structure of the group. We plan to use the revenue derived from the bond issue to cover the additional credit risk arising from the growth of the group corporate and home loan portfolio in Estonia, Latvia, and Lithuania, as well as to meet regulatory capital requirements," explained Martin Länts, Chairman of the Management Board.
“When fixing the interest rate of the bond issue, we took into account the continued decline of base interest rates in Europe and the interest rate context shaped by the recent public issue and trading of Estonian government bonds. Bigbank has a highly diversified and well-performing loan portfolio, made up of private home and consumer loans and corporate leasing products as well as corporate development and investment loans. We are a well-managed, and modern bank operating effectively via digital channels. We have always paid our depositors interest that is among the highest in the market, made competitive offers for loan products and targeted at investors in recent years already three successful and oversubscribed bond issues with a total volume of 47 million euros,“ Länts said.
Bigbank, with a more than 30-year history, is a commercial bank owned by Estonian shareholders. As of 30 June 2024, the bank’s balance sheet total was 2.6 billion euros and shareholders’ equity was 252.8 million euros. The bank operates in 9 countries, has more than 150,000 active customers, and employs over 500 employees. The Moody’s Credit Rating Agency has given long-term Bigbank bank deposits in foreign and local currencies a rating of Ba1 and base credit rating (BCA) of Ba2, with an adjusted BCA of Ba2.
Main terms of the public offering of bonds
The base volume of the public offering that started today is EUR 3 million which in case of oversubscription can be increased to EUR 8 million. In the framework of the offering, Bigbank offers up to 3,000 unsecured subordinated bonds under the name EUR 6.50 BIGBANK ALLUTATUD VÕLAKIRI 24-2034, with the nominal value of EUR 1,000 each, the maturity date on 23 October 2034 and fixed interest rate of 6.5 percent per annum, payable quarterly. In case of oversubscription, Bigbank has the right to increase the volume of the offering up to 8,000 bonds. Bigbank has also the right to cancel the offering in the volume not subscribed. The unsecured subordinated bonds are offered with the price of EUR 1,000 per one bond.
The subscription period for the bonds starts today, 8 October 2024 at 10:00 and will end on 18 October 2024 at 15:30. The offering will be targeted to retail and professional investors in Estonia, Latvia, and Lithuania.
Subordinated bond represents an unsecured debt obligation of Bigbank before the investor. The subordination of the bonds means that upon the liquidation or bankruptcy of Bigbank, all the claims arising from the subordinated bonds shall fall due and shall be satisfied only after the full satisfaction of all unsubordinated recognised claims in accordance with the applicable law. Among other things, with subordinated bonds, the risk of write-down or conversion of liabilities and claims (bail-in risk) must be considered. Specific details of the Offering are provided in the prospectus and the prospectus summary for third series.
The general goal of this offering is to strengthen the capital structure of the group and secure stable access to additional capital to finance the group’s budget and growth as foreseen in the Bigbank strategic plan.
The bank intends to use the revenue derived from the bond issue to cover the additional credit risk arising from the growth of the group corporate and home loan portfolio in Estonia, Latvia, and Lithuania, as well as to meet the regulatory capital requirements.
Bigbank will submit an application to Nasdaq Tallinn AS for the listing and admission to trading of subordinated bonds in the list of Baltic bonds of the stock exchange. The expected date of listing and admission to trading is on or about 24 October 2024.
The prospectus (including its supplements 1 and 2), the bond terms and conditions, the final terms of the third offering and the summary of the prospectus of the third offering have been published and can be obtained in electronic format from Bigbank’s website https://investor.bigank.eu and the website of the Financial Supervision Authority https://www.fi.ee. In addition to the above, the translations of the summary of the prospectus of the third offering into Estonian, Latvian and Lithuanian can be obtained in electronic format from Bigbank's website https://investor.bigbank.eu.
Before investing into Bigbank’s unsecured subordinated bonds we ask you to acquaint yourself with the summary of the prospectus (including its supplements 1 and 2), the summary of the third offering, the bond terms and conditions and the final terms and conditions of the third offering in full and if necessary, consult with an expert.
Additional information:
Argo Kiltsmann
Member of the Management Board
Tel: +372 53 930 833
Email: [email protected]
www.bigbank.ee
Important information
This notice is an advertisement for securities within the meaning of the Regulation No 2017/1129/EU of 14 June 2017 of the European Parliament and of the Council European Parliament and does not constitute an offer to sell subordinated bonds or an invitation to subscribe to subordinated bonds. Each investor should make any decision to invest in the bonds only based on the information contained in the prospectus (including supplements 1 and 2), its third series summary, the terms and conditions of the bonds, and the final terms of the bonds for the third series. The approval of the prospectus by the Financial Supervision Authority is not considered to be a recommendation for Bigbank’s subordinated bonds. The information contained in this notice is not intended to be published, distributed, or transmitted, in whole or in part, directly or indirectly, in any country or under any circumstance where publication, sharing or transmission would be unlawful or to any persons to whom the competent authorities have applied financial sanctions. Bigbank’s unsecured subordinated bonds will be publicly offered only in Estonia, Latvia and Lithuania and the sale or offer of the bonds shall not take place in any jurisdiction where such offer, invitation or sale would be unlawful without the exception or qualification of law or to any persons to whom the competent authorities have applied financial sanctions. The unsecured subordinated bonds are offered solely based on the prospectus (including supplements 1 and 2), its third series summary, the terms and conditions of the bonds, and the final terms of the bonds for the third series, and the Offering is intended only for the persons to whom the prospectus is directed. The present notice is not reviewed or confirmed by any supervisory authority, and it does not constitute a prospectus.