To secure an additional source of funding for the Latvenergo Group’s long-term capital investment programme, as well as make a major step towards enhancing the company’s image, recognition and competitive performance, the Group issoued to issue public bonds as part of its borrowing programme at the end of this year. More about business environment in Latvia you can read in section About Latvia.
The funding attracted by issuing bonds will be directed towards the Latvenergo Group’s projects to invest in generation, distribution and transmission network assets. Whereas so far, Latvenergo has attracted supplementary funding for its long-term capital investment programmes, a decision to attract financing by issuing bonds will allow the power company to draw on additional sources of funding on favourable provisions, to diversify its portfolio of borrowers, and increase its recognition among investors, facilitating the attraction of funding in the coming years.
On the 13th of December the placement of investor’s applications for the issue of the first series of Latvenergo notes in the amount of EUR 20m took place. As the investors' interests exceeded the expectations considerably, the first issue of the notes of Latvenergo Concern has been very successful.
Within the framework of the issue of the first series of Latvenergo AS notes on the 13th of December the placement of investors' applications for the issue of notes in the amount of EUR 20m with the maturity terms of the notes of 5 years took place. The total demand for the notes at the end of the placement period was above EUR 90 million, thus exceeding the planned issue amount by 4.6 times. Considering the huge investor interest during the placement period, the yield to maturity range was decreased and the final yield was set at 2.8353% at the end of the placement period. Thus, the issue of the first series of Latvenergo AS notes should be evaluated as very successful.
During the placement period purchase orders were received from more than 50 investors who represented all the three Baltic countries. There are banks, pension funds, asset management funds and insurance companies among the investors.
Latvenergo has demonstrated itself as a reliable investment partner for a broad range of investors also across the borders. It is very good for the image of Latvia. The inclusion of the notes of Latvenergo in the stock exchange means not only the possibility for attracting financing from investment and pension funds, which basically invest in the securities listed in the stock exchange, this is also the attestation of the maturity of the company - it is voluntarily assuming liability to increase the transparency of its operation and finance, to provide more frequent and broader detailed information on the financial results and essential news. This information impacts both the price of the notes on the market and also the future costs of attracting financing for the company. When a company proves its stability to investors over a course of time, it gains the opportunity of using more beneficial borrowing rates in future. This issue confirms that if there is willingness, also other state companies can be transparent and present the interest for investors.
If you consider that Latvia is safe place for your investments and wish to invest in Latvia, you can get more information in section company formation.
