Estonia

Luminor Bank was more than 3-1/2 times subscribed on its return to the euro market on Wednesday, allowing it to demonstrate a year-on-year improvement in its senior funding costs.

Trading levels given are bid-side spreads versus mid-swaps and/or an underlying benchmark and bid-yields from the close of business on Monday, June 8. The source for secondary trading levels is ICE Data Services.

Estonia returned to the capital markets on Wednesday after 18 years away, introducing itself to a new set of investors as an SSA borrower.

Estonia’s LHV Pank sold its first covered bond on Tuesday, attracting very good demand for the sub-benchmark deal, which provided it with long term funding from new investors.

The Republic of Estonia has mandated for a 10 year benchmark bond, as it prepares for its first foray into bond markets since 2002.

LHV Pank has mandated leads for its inaugural deal and the second ever to be launched under the newly established Estonian covered bond legal framework.

Estonia’s LHV Pank is set to become the second bank in the country to take advantage of the country’s covered bond law and, having set up a programme and gained central bank authority to issue, Moody’s this week assigned a rating to its programme.

Luminor Bank attracted strong demand for its debut covered bond on Wednesday, the first under Estonia’s legal framework and the first from the Baltic region. Despite a negative reoffer yield, it attracted a higher subscription ratio than any other five year euro benchmark issued this year.

Luminor Bank is expected to issue its debut covered bond after successfully concluding a roadshow this week. The deal will be the first Baltic covered bond under the Estonian legal framework.

Luminor Bank has mandated leads for the first covered bond from the Baltic region.

An Estonian covered bond could soon be due in the market after Moody’s rated Luminor Bank’s programme this week — the first to be structured under the country’s newly established law. The rating comes after the European Central Bank granted Luminor a license to issue covered bonds in December.

Luminor Bank is likely to issue the debut Estonian covered bond in the first quarter of 2020 according to the bank’s head of treasury, Max Ehrengren. Although the programme will have capacity to issue deals secured on Lithuanian and Latvian assets, the inaugural transaction will be exclusively secured on Estonian assets.