Luminor Bank Senior Preferred Bonds

Overview
Project Summary Document
Environmental and Social Documentation
Procurement
Complaints

Overview

Investments of up to EUR 100 million in a series of senior preferred bonds ("SP Bonds") and senior non-preferred bonds ("SNP Bonds") to be issued by Luminor Bank AS in Estonia ("the Issuer") until March 2026 and admitted for trading on the Irish Stock Exchange. EBRD's investment in each issue will be limited to up to 20% of the issuance size.

On 31 May 2023, EBRD invested EUR 50 million in the issuance of EUR 300 million senior preferred bonds by the Issuer. The bonds have a four-year maturity with a call option on the third year.

On 3 September 2024, EBRD invested EUR 20 million in the issuance of EUR 300 million senior preferred bonds by the Issuer. The bonds have a four-year maturity with a call option on the third year.

Project ID 54334

Status Signed

Location

Regional

Business Sector

Financial Institutions

Notice Type

Private

Project timeline

Exploratory
Passed Concept Review
Passed Structure Review
Passed Final Review
Board Approved
Signed
Implementing
Completed

Company Contact Information

Nick Turnor
nick.turnor@luminorgroup.com; info@luminor.ee
+372 5306 7820
www.luminor.ee/en/investors
Luminor Bank A.S. Liivalaia 45 10145 Tallinn Estonia

Project ID 54334

Status Signed

Location

Regional

Business Sector

Financial Institutions

Notice Type

Private

Environmental Category

Approval Date

22 Mar 2023

Disclosure date

09 Jun 2023

As permitted by paragraph 2.6 of Section III of the Access to Information Policy, disclosure of this PSD was deferred in accordance with paragraph 1.4.4 of the Directive on Access to Information.

Project description

On 31 May 2023, EBRD invested EUR 50 million in the issuance of EUR 300 million senior preferred bonds by the Issuer. The bonds have a four-year maturity with a call option on the third year.

On 3 September 2024, EBRD invested EUR 20 million in the issuance of EUR 300 million senior preferred bonds by the Issuer. The bonds have a four-year maturity with a call option on the third year.

Project objectives

The project supports the resilience of a systemic bank through achieving regulatory compliance and ensures its continued access to international capital markets. The Project aims to scale up Green Economy Transition ("GET") financing in the Baltic countries with the Issuer agreeing to allocate 150% of the EBRD's invested amount into GET-eligible projects.

Transition impact

ETI Score:68

ject's expected transition impact derives from its contribution to the Resilient and Green transition qualities.

Resilient - by (i) strengthening the resilience and regulatory compliance of a systemic institution, and (ii) promoting capital market issuances by Baltic banks especially at times of still destabilised market environment.

Green - by promoting the green agenda in the Baltic countries through Luminor's commitment to issue at least one Green Bond during the project's life or channeling 1.5 times the EBRD's investment in non-Green Bonds to GET-eligible projects.

Client information

LUMINOR BANK AS

Luminor was established in October 2017 through the merger of Nordea Bank Abp's and DNB Bank ASA's operations in the Baltics. Based in Estonia (with banking branches in Latvia and Lithuania), it is the third largest banking group in the Baltics with market share of 14% in lending across the Baltics at end 1H2024. In October 2019, a consortium of private equity funds led by Blackstone acquired a majority stake in Luminor. It is a systemic bank directly supervised by the European Central Bank ("ECB").

EBRD Finance Summary

In the first issuance, EBRD invested EUR 50 million.

In the second issuance, EBRD invested EUR 20 million.

Total project cost

EUR 600,000,000

Additionality

The project is additional as it (i) supports Luminor to successfully raise sizable loss-absorbing funding given the disrupted global capital markets and (ii) contributes to Luminor's green agenda.

Environmental & Social Summary

Categorised FI (ESP 2019). Luminor is an existing client of the Bank and will be required to continue to comply with PRs 2, 4 & 9, to adhere to the EBRD's E&S requirements and submit AESRs to the Bank. As for all capital market transactions, Category A projects are excluded. The funding allocated towards GET-eligible projects will need to follow the E&S Eligibility Criteria for Wind, Solar, Hydro, Bioenergy and Geothermal projects, if such projects are being financed.

Technical Cooperation and Grant Financing

N/A

Company Contact Information

Nick Turnor
nick.turnor@luminorgroup.com; info@luminor.ee
+372 5306 7820
www.luminor.ee/en/investors
Luminor Bank A.S. Liivalaia 45 10145 Tallinn Estonia

PSD last updated

12 Sep 2024

Understanding transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with the EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and its associated Environmental and Social Requirements (ESRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”. The ESP and the ESRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation, and to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about the environmental and social (E&S) performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD also requires its clients to disclose information, as appropriate, about the risks and impacts of projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and compliance

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all of the Bank's activities in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The EBRD believes that identifying and resolving issues in the project assessment and approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts andhelps to monitor integrity risks in projects post-investment.

OCCO is further responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, either within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. OCCO will follow-up all matters reported. It will review all matters reported. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP, which entered into force on 1 January 2025, sets out how the EBRD discloses information and consults with its stakeholders to promote better awareness and understanding of its strategies, policies and operations. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD enquiries form.

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (for example, through the client’s project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the mechanism is: to support dialogue between project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or the project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate and how to submit a Request for review. Alternatively, contact IPAM by email at ipam@ebrd.com for guidance and more information on IPAM and how to submit a request.

Environmental and Social Documentation is not available for this project.

Selected procurement notices related to this project may be shown below. Further procurement opportunities related to this and other projects, if available, maybe be viewed in the EBRD Procurement Portal.

The EBRD's Environmental and Social Policy (ESP), Access to Information policy (AIP) and Project Accountability Policy (PAP) enable sound and sustainable development in its projects. The Independent Project Accountability Mechanism (IPAM) deals with complaints about environmental, social and disclosure matters related to the Bank’s investments.

No complaints about this project have been made so far.

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Luminor Bank Senior Preferred Bonds

Overview

Project timeline

Company Contact Information

Project description

Project objectives

Transition impact

Client information

EBRD Finance Summary

Total project cost

Additionality

Environmental & Social Summary

Technical Cooperation and Grant Financing

Company Contact Information

PSD last updated

Understanding transition

Business opportunities

General enquiries

Environmental and Social Policy (ESP)

Integrity and compliance

Access to Information Policy (AIP)

Independent Project Accountability Mechanism (IPAM)