OREANDA-NEWS. June 26, 2012. Rietumu Bank starts the first public offering of its subordinated bonds. The securities with fixed income are nominated in EUR and USD, and their coupon rate is 7% p.a., reported the press-centre of Rietumu Bank.  

Rietumu Bank has already been providing the services of purchase and sale of various bonds for several years and has extensive experience in this field. Now the bank is taking on the role of the issuer by offering its own bonds with a rather high yield.

The public offering of subscription to the first emission will last until 24 August – during this period bonds to the amount of EUR 10 million and USD 6 million will be issued.

The bonds are issued for the term of seven years with a possibility of early redemption in five years at the initiative of the bank. They will be included in the list of debt instruments of NasdaqOMX Riga. The nominal value of one bond is EUR 50 thousand or USD 75 thousand. Interest for the Rietumu Bank coupon will be paid to the clients once every half a year.

“These financial instruments are intended primarily for current clients of the bank who are interested in obtaining gainful and reliable securities. At the same time, securities of local issuers recover the Latvian stock market and allow institutional players, including pension funds, to invest funds not only in Scandinavian and other foreign assets, but also in local financial instruments,” notes Alexei Generalov, Head of the Financial Institutions and Capital Markets Department of Rietumu Bank.

It is also important to note that the status and format of the issue allow foreign holders of these securities, with the nominal value starting from EUR 300 thousand, to obtain a residence permit in Latvia. Earlier for these purposes Rietumu Bank offered investments in the form of a subordinated loan (deposit) to its clients – the bonds may become another instrument of such investments. Up to now the status of a European resident, which allows free movement throughout the entire Schengen Zone, has been received by about 500 clients of Rietumu Bank and their family members from Russia, Belarus, Ukraine, Kazakhstan and other countries.