Blog | Bigbank issues unsecured subordinated bonds with 8 percent interest rate and intends to list them on Nasdaq Tallinn Stock Exchange

Bigbank issues unsecured subordinated bonds with 8 percent interest rate and intends to list them on Nasdaq Tallinn Stock Exchange

Today Bigbank, a provider of digital banking services on European markets, announced a public offering of bonds in Estonia, Latvia, and Lithuania with the total volume of 10-20 million euros. Investors can subscribe to Bigbank’s ten-year unsecured subordinated bonds with the annual interest rate of 8%, payable quarterly. The subscription period starts today and ends on 16 September. Bigbank intends to list the bonds on the Baltic Bond List of the Nasdaq Tallinn Stock Exchange in order to secure liquidity and free trading.

„Bigbank is specialised in loans and is providing digital banking services in nine European countries at present. For several years now, Bigbank has been among the fastest growing banks in Estonia and the Baltic countries as a whole. We want to continue the rapid growth of our home and corporate loans. The general goal of this transaction and offering is to strengthen the capital structure of the group and secure stable access to additional capital in order to finance the group’s budget and growth as foreseen in our strategic plan,“ explained Martin Länts, Chairman of the Bigbank Management Board. „Our plan to list the bonds to be issued on the Baltic Bond List of the Nasdaq Tallinn Stock Exchange and thus acquire the status of a publicly listed company will be an important quality label which helps us promote our bank and its banking products on an even broader scale both among potential clients and the general public.“

In the current inflationary environment, a listed subordinated bond with 8% fixed interest for a 10 year period is an instrument worth considering for placing one’s savings.
Martin Länts, CEO

“Bigbank has a highly diversified loan portfolio, made up of private home and consumer loans and corporate development and investment loans. We are a well-managed, and modern bank operating effectively via digital channels. In my opinion the Bigbank bond is an attractive opportunity for investment,“ Länts said. “In the current inflationary environment, a listed subordinated bond with 8% fixed interest for a 10 year period is an instrument worth considering for placing one’s savings, “ he added.

Pursuant to the new strategy Bigbank plans to increase its private and corporate loan portfolio in the next five years both by way of natural growth and possible acquisitions. According to Länts, as an important move aimed at extending the client base, the bank intends to start providing additionally to loans also daily banking services. To begin with, VISA credit cards will be offered to the clients at the beginning of next year at the latest.

Bigbank is a commercial bank that started its activities in Estonia and celebrates 30 years in business this year. Last year its total assets exceeded one billion euros. As on 30 June 2022 the bank’s balance sheet total was 1.4 billion euros and shareholders’ equity 193 million euros. In 2021 the balance sheet total grew 52% and in the first six months of 2022 another 24.7%. The bank operates in nine countries, has 126,000 active clients and almost 500 employees.

On 1 July the Moody’s Credit Rating Agency gave the Bigbank bank deposits in foreign and local currencies a rating of Baa3 on the long-term rating scale and Prime-3 on the short-term rating scale. 

Main terms of the public offering of bonds

During the public offering started today Bigbank offers up to 10,000 unsecured subordinated bonds with the name of EUR 8.00 Bigbank subordinated bond 22-2032, with the nominal value of EUR 1,000 each, the maturity date 21 September 2032 and fixed interest rate of 8% per annum, payable quarterly. In case of oversubscription, Bigbank has the right to increase the volume of the offering up to 20,000 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, 6 September 2022 at 10:00 and will end on 16 September 2022 at 15:30. The offering will be targeted to retail and institutional 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. Detailed information is available in the prospectus and in the summary of the prospectus.

The general goal of this transaction and offering is to strengthen the capital structure of the group and secure stable access to additional capital in order to finance the group’s budget and growth as foreseen in the Bigbank strategic plan.

The company 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, and to meet the additional requirements related to Tier 2 capital prescribed by law.

The revenue derived within the framework of the bond issue may also be used for the premature redemption of the existing unsecured subordinated bonds issued by Bigbank, on the condition that Bigbank is entitled to redeem such bonds prematurely in accordance with the applicable bond terms. 

* Bigbank has submitted an application to Nasdaq Tallinn AS for the listing and admission to trading of the subordinated bonds on the Baltic Bond List of the Stock Exchange. The expected date of listing and admission to trading is on or about 22 September 2022.

The prospectus and the summary of the prospectus 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 prospectus, the summary of the prospectus and the translations of the summary into Estonian, Latvian, and Lithuanian are available through the information system of the Stock Exchange. The bond terms of Bigbank’s unsecured subordinated bonds have been published and 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 prospectus, and the terms of the offering in full in order to fully comprehend the possible risks and benefits related to the decision of investing in securities and if necessary, consult with an expert.

Additional information:

Argo Kiltsmann
Member of the Management Board
Tel: +372 53 930 833
e-mail: [email protected]

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 and does not constitute an offer to sell the Bigbank unsecured subordinated bonds or an invitation to subscribe to subordinated bonds. Before making a decision to invest we ask you to acquaint yourself with the prospectus, and the summary of the prospectus and if necessary, consult with an expert. Each investor should make any decision to invest only on the basis of the information contained in the prospectus and the summary of the prospectus. The approval of the prospectus by the Financial Supervision Authority is not considered to be a recommendation for Bigbank’s unsecured 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 the United States, Canada, Hong Kong, Japan, Singapore, South Africa, or in any other country or under any circumstance where publication, sharing or transmission would be unlawful. Bigbank’s unsecured subordinated bonds will be publicly offered only in Estonia, Latvia and Lithuania and the sale or offer of the subordinated bonds shall not take place in any jurisdiction where such offer, invitation or sale would be unlawful without the exception or qualification of law.