NKBM Bond Investment

Location:

Slovenia

Project number:

52798

Business sector:

Financial institutions

Notice type:

Private

Environmental category:

FI

Approval date:

13 May 2021

Status:

Signed

PSD disclosed:

20 May 2021

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

The EBRD invested EUR 37.5 million (29.8% of the issuance amount) in a senior non-preferred bond (the "bond") by Nova Kreditna Banka Maribor d.d. ("NKBM") as part of a privately placed issuance of EUR 125.7 million. The issuance was marketed mainly to local institutional investors. This is the first senior non-preferred instrument issued by a Slovenian bank since the introduction of the EU Bank Recovery and Resolution Directive in the country.

Project Objectives

The project supports the resilience and regulatory compliance of the second largest bank in Slovenia and contributes to the capital market development in the country. The project also aims to support strong Green-impact targets with at least 150% of the EBRD's investment to be allocated to financing green projects in line with the EBRD's Green Economy Transition ("GET") eligibility criteria.

Transition Impact

ETI score: 63

The expected transition impact stems from its contribution to the resilient and green transition qualities:

  • Resilient: The bond will contribute to (i) increasing NKBM's loss-absorption capacity and resilience to market or regulatory shocks as well as the bank's regulatory compliance and (ii) capital market development by introducing a new instrument;
  • Green: The project will support the EBRD's GET approach in Slovenia through NKBM allocating 150% of EBRD's investments to GET-eligible projects further promoting the green agenda in Slovenia.

Client Information

NOVA KREDITNA BANKA MARIBOR DD

NKBM is the second largest bank in Slovenia with a market share by total assets of 21% as of end 2020. NKBM is classified as a systematically important institution in Slovenia. The ultimate owners of NKBM are Apollo Global Management, LLC (80%) and EBRD (20%). NKBM is rated BBB- by Fitch (stable outlook) and Baa1 by Moody's (stable outlook), both investment grade.

EBRD Finance Summary

EUR 37,500,000.00

Total Project Cost

EUR 125,700,000.00

Additionality

The project demonstrates strong additionality by i) supporting NKBM to cover a sizeable requirement of bailinable funding in a nascent local market, (ii) introducing a novel instrument in the Slovenian local market, and (iii) encouraging NKBM's green agenda by promoting financing of green projects in line with EBRD's GET approach.

Environmental and Social Summary

Categorised FI (ESP 2019). NKBM is an existing client and is in compliance with PRs 2, 4 and 9. NKBM will be required to continue to comply with the EBRD's Environmental requirements and submit annual environmental and social reports to the Bank. Renewable energy projects financed with EBRD's use of proceeds will need to follow the E&S Eligibility Criteria for such projects.

Technical Cooperation and Grant Financing

N/A

Company Contact Information

Ms Romana Muraus
rmuraus@nkbm.si
+386 2 2292286
www.nkbm.si
Nova KBM d.d. Ulica Vita Kraigherja 4 2000 Maribor Slovenia

Implementation summary

N/A

PSD last updated

20 May 2021

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 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 the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”.  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social 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 additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from 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 activities of the Bank 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 Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both 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. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. 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 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.

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 (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 ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.

 

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