Banca Transilvania raises 500 mln euro in ESG bond placement

The bond issue attracted orders of over 1.65 billion euro and was oversubscribed within a few hours, causing the interest rate to fall from 7.75% at the start of the order placement to 7.25% at the end, Banca Transilvania said in a press release on Thursday.

A total of 108 institutional investors including investment funds, financial institutions, commercial and central banks, as well as insurance and trading companies, subscribed to the offer, with 90% of the issue subscribed by international investors from 21 countries.

The lender’s inaugural ESG bond placement is listed on the Dublin Stock Exchange and comprises a social component and a green component. The bonds contribute to an optimal level of MREL-eligible funds, separate from customer deposits, which are guaranteed by the Bank Deposit Guarantee Fund, Banca Transilvania said.

The bond issue was coordinated by arrangers JP Morgan SE, Citigroup Global Markets Europe AG, and ING Bank N.V, which also acted as the sole sustainability advisor. BT Capital Partners acted as co-manager.

In August, Banca Transilvania supplemented its bond issuance programme with an additional 190 million euro, bringing the total amount raised close to 1 billion euro.

The lender’s net profit rose by 29% on the year in the first nine months of 2023, reaching 1.859 billion lei($402.9 million/374.2 million euro), according to its financial report filed with the Bucharest Stock Exchange in November. In 2022, the bank’s net profit grew by an annual 22% to 2.178 billion lei.

Banca Transilvania shares traded 0.87% higher at 23.28 lei as at 1027 CET on December 8 on the Bucharest bourse.

($=0.9288 euro)