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Latvenergo pioneer in Latvia’s corporate bond market

State-owned energy company Latvenergo late last year became the first public Latvian company to issue corporate bonds. SEB organised and placed the 20 million euro issue.

The issue was four times oversubscribed with 80 per cent of the bonds acquired by local banks and asset managers. Investors in Estonia and Lithuania acquired the remaining 20 per cent.

“The first issue of bonds gave us the assurance that the securities of Latvenergo Group are very in demand, which means that investors believe in our stability and our ability to start planning the next supply of issue series in the nearest future,” says Latvenergo’s Chief Financial Officer Zane Kotāne.

She says the company plans to list the bonds on a stock exchange shortly, thereby increasing the scope of information about the bonds and their availability to a wider range of investors. The preparation for the bond issue also facilitated the introduction of strong corporate governance principles in the company.

“The successful issue of Latvenergo bonds and the demand for the securities is proof that companies in Latvia and across the Baltic region can finance their long-term development not only by using a loan in its usual meaning,” says Ainārs Ozols, head of SEB in Latvia.

He says the fact that demand exceeded supply several times also indicates an interest by Baltic investors to find new investment possibilities.