Investments of up to EUR 125 million in a series of covered bonds issued by Luminor Bank AS in Estonia ("Luminor") under the Euro Medium Term Note and Covered Bond Programme ("Programme") over a period of 3 years and admited for trading in the Irish Stock Exchange. EBRD's investment in each issue will be limited to 20% of the issue size.
On 4 March 2020, EBRD invested EUR 28 million in the first covered bond issuance of EUR 500 million under the Prgramme.
The objective of the project is to support the establishment of a new capital market instrument in the baltics. The project supports the first ever issuance of covered bonds in the Baltic States and it is fully consistent with Bank's policy engagement, aimed at development of regional capital markets in the Baltics.
ETI score: 65
The project supports the resilience of the financial sector and markets by (i) increasing the supply of investable listed instruments for local and international investors (i.e. covered bonds and the Pan Baltic Covered Bonds), and (ii) helping Luminor diversify the funding sources and improving the asset liability mismatch.The Well-governed quality is underpinned by the EBRD's extensive policy dialogue on the development and integration of the capital markets in the Baltics; which, among other, include (i) supporting Estonia (as well as Latvia and Lithuania) to develop the covered bond legislation, and (ii) the development of the Pan-Baltic Covered Bond Framework that will facilitate the issuance of Pan-Baltic Covered Bonds.
LUMINOR BANK AS
Luminor was established in October 2017 through the merger of Nordea Bank Abp and DNB Bank ASA in the Baltics. Based in Estonia, it is the third largest banking group in the Baltics with a market share of 18.7% in lending across the Baltics. In October 2019, a consortium of private equity funds managed by Blackstone acquired a majority stake in Luminor. It is a systemic bank directly supervised by the European Central Bank ("ECB").
EBRD Finance Summary
For the first covered bond issuance, EBRD invested EUR 28 million.
Total Project Cost
The size of the first covered bond issuance was EUR 500 million.
The total size of the Programme is EUR 3 billion.
Endorsing a newly developed asset class and innovative structure of Pan Baltic Covered Bond consistent with policy engagement, supporting benchmark size issuances from a relatively new issuer in the international capital markets, providing comfort to other investors given the Bank's role as a significant investor in covered bonds.
Environmental and Social Summary
Categorised FI. Luminor is an existing client and an E&S Management Plan has been developed to assist Luminor in their implementation of the EBRD ESP's PR9. Luminor is required to comply with PRs 2, 4 and 9; implement relevant EBRD Environmental and Social Risk Management Procedures and submit annual reports to EBRD.
Technical Cooperation and Grant Financing
Company Contact Information
+372 628 3300
Luminor Bank A.S. Liivalaia 45 10145 Tallinn Estonia
PSD last updated
09 Mar 2020
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Environmental and Social Policy (ESP)
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More information on the EBRD’s practices in this regard is set out in the ESP.
Integrity and Compliance
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Access to Information Policy (AIP)
The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.
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Independent Project Accountability Mechanism (IPAM)
If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. 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 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; how to submit a Request for review; or contact IPAM via email firstname.lastname@example.org to get guidance and more information on IPAM and how to submit a request.