Šiaulių bankas AB issues EUR 50 million subordinated bonds

Šiaulių bankas AB has successfully completed a 10-year subordinated bond issue with a nominal value of EUR 50 million in the international financial markets, which will bear a coupon of 10.75%. Subordinated bonds are included into the bank's Tier 2 capital, so having a larger capital base will give the Bank more scope for sustainable growth and higher returns to shareholders.

"With sustained growth, it is natural that we are becoming increasingly attractive to both Lithuanian and foreign institutional investors. We are more frequently entering international markets, but this is the first subordinated bond issue we have placed in international markets, and it has attracted more attention from investors than we expected. The funds raised will help the Bank to maintain the volume of lending to Lithuanian businesses, to achieve an efficient capital structure, to meet the requirements of the supervisory authority, and to keep the continuity of the dividend policy" said Tomas Varenbergas, Head of Treasury and Markets of Šiaulių bankas AB.

The bonds were issued with the issuer's right of early redemption after five years, on 22 June 2028. On this date, the Bank will have two options: to redeem the issued bonds early or to set a new coupon consisting of a fixed and a floating part (750bps + 5-year Mid-Swap Rate). The bonds issue date on 22 June 2023 and maturity date on 22 June 2033. 

The bonds were issued under EUR 100 million Subordinated Bond Programme approved by Bank of Lithuania dated 13th June 2023 and will be listed on the Nasdaq Vilnius Bond List. The international rating agency Moody's has assigned a Ba1 rating to the subordinated bond issue.