OREANDA-NEWS. Considering positive recent bond issue experience and continuing successfully started diversification of Latvenergo Group funding sources in capital markets as well as promotion of corporate awareness in the Baltic scale, on 12 May 2014, the shareholder of Latvenergo AS decided to issue debt securities (bonds) up to 100 million euro under a new bond offering programme. The decision to raise the funds by issuing bonds will allow Latvenergo AS to find additional sources of financing on a favourable terms and conditions.

Subject to favourable situation in capital markets, Latvenergo AS could start bond offering to the public already within the second half of this year. Specific bond issue parameters will be defined during the drafting process of bond documentation. The bonds will not be convertible, similarly to ones issued under the previous programme for the issuance of bonds, meaning that Latvenergo AS is and will remain a company fully owned by the state. Issued bonds are planned to be listed in NASDAQ OMX Baltic Bond List.

Financing raised through bond issue will be used for Latvenergo Group capital investments in generation, distribution and transmission network assets. The main projects currently implemented by Latvenergo Group include Kurzeme Ring construction project of the transmission system and an extensive programme of distribution network system, as well as Daugava HHPs hydropower unit reconstruction programme. The aim of the projects is to ensure qualitative, safe and reliable service to all the clients. Latvenergo Group capital investments are planned on average 250 million euro in a year and their implementation is partially financed by own funds and partially by the borrowed capital. In 2013, the amount of investments was 225 million euro.

Issue of bonds is globally accepted practice in the power industry. Bonds have issued Estonian energy company Eesti Energia, Lithuanian electricity companies as well as other large power companies in Europe.

In 2012 and 2013, Latvenergo AS issued 5-year and 7-year bonds borrowing 105 million euro from investors under the programme for the issuance of bonds launched in 2012.

In 2013, Latvenergo AS, the first wholly state-owned company successfully issuing public bonds on the Baltic exchange regulated market, was rewarded with NASDAQ OMX Riga annual Award on exceptional performance on the securities market and contributions to its development thus demonstrating that capital markets can provide the funding for transparent and well-managed companies.