AS Citadele Banka bonds

Location:

Latvia

Project number:

53246

Business sector:

Financial institutions

Notice type:

Private

Approval date:

10 Nov 2021

Status:

Signed

PSD disclosed:

12 Nov 2021

Project Description

An investment of up to € 50 million senior preferred (SP) bonds to be issued by AS Citadele Banka and dually listed on the Irish Stock Exchange plc trading as Euronext Dublin and Nasdaq Riga AS. The project represents the first SP bond issuance out of Latvia since the introduction of the EU Bank Recovery and Resolution Directive and the EU minimum requirement for own funds and eligible liabilities (MREL) guidelines in the country.

Project Objectives

The project aims to support the resilience and regulatory compliance of the second largest bank in Latvia and contributes to the capital market development by attracting international investors to the Baltic region. The project will also support the EBRD's Green Economy Transition (GET) approach with most of the Bank's investment allocated for financing GET-eligible subprojects.

Transition Impact

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

i Resilient: The bond will contribute to (i) capital market development by expanding the range of capital market instruments by the Latvian issuer and attracting international investors to the Baltic region and (ii) the resilience of Citadele by helping to diversify its funding sources through capital market issuances and closing the regulatory funding gap.

i Green: The bond will support Latvia's and Citadele's green agenda. The issuer is committed to allocate a significant part of the EBRD's investment for financing green projects in line with the Bank's GET-eligibility criteria.

Client Information

CITADELE BANKA AS

AS CITADELE BANKA

Citadele is Latvia's second largest bank by total assets with c. 19 per cent market share as of end-2020. It is classified as a systemic bank and directly supervised by the European Central Bank. The bank is rated BAA2/stable by Moody's, the rating agency. Citadele is owned by the consortium of investors led by Ripplewood Advisors, which holds a 75 per cent stake in the bank with the remaining 25 per cent held by the EBRD.

 

EBRD Finance Summary

EUR 50,000,000.00

Total Project Cost

EUR 250,000,000.00

Additionality

Additionality mainly stems from: (i) supporting Citadele to successfully issue a sizable first SP bond, (ii) supporting Citadele to widen the investor base by sending a positive signal to other investors, and (iii) contributing to Citadele's green agenda by requiring to allocate a multiple of the proceeds from the EBRD's investment, and hence encouraging the bank to set ambitious green financing targets.

Environmental and Social Summary

Categorised FI (ESP 2019). Citadele is an existing client and is in compliance with PRs 2, 4 and 9. The Issuer 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 the EBRD's use of proceeds will need to follow the E&S Eligibility Criteria for such projects. Solar sub-projects will be managed in line with 'The Proposed Management Approach for Solar Supply Chain Risk Management' (CS/FO/21-35) and any subsequent guidance developed under that approach.

Company Contact Information

Natalija Fokina
Natalija.Fokina@citadele.lv
https://www.citadele.lv/
SC "Citadele bank", Republikas laukums 2A, Riga, LV-1010, Latvia

PSD last updated

12 Nov 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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