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ZAGREB (Croatia), December 4 (SeeNews) - The European Bank for Reconstruction and Development (EBRD) said on Tuesday it has invested 45 million kuna ($6.9 million/6.1 million euro) in five-year bonds of Erste&Steiermarkische Bank, the Croatian subsidiary of Austria’s Erste Group Bank.
The proceeds from the bonds issue will enable Erste to diversify its funding base for its core business and to strengthen balance sheet by securing long-term wholesale kuna funding, the EBRD said in a press release.
The bond issuance will contribute to the development of Croatia's capital market and the securities will be listed on the Zagreb Stock Exchange, the bank said.
The five-year bonds were issued on November 30 under the designation RIBA-O-23BA, Axel Reiserer, EBRD head of media relations, told SeeNews in an e-mailed statement.
Erste&Steiermarkische Bank said last week it raised 300 million kuna from the sale of a five-year fixed-rate bonds bearing a coupon of 1.5% and maturing on November 30, 2023.
"We are very pleased to see a long-term kuna issuance by a Croatian bank on the local market. Such funds acquisition contributes to greater resilience of the banking sector in the country as well as contributing to the more stable balance sheet structure in the banking sector," Lucyna Stanczak-Wuczynska, EBRD director for EU banks in the Financial Institutions Group, said in the press release.
In Croatia, the EBRD has been active in promoting covered bonds as a secure instrument which offers the stability long-term investors typically seek, the bank noted.
"With our investments we aim to support the development of the local capital market and the provision of funds to the local economy. Participation in the Erste bond issue is an important step in this effort," Victoria Zinchuk, EBRD director for Croatia, commented.
Erste&Steiermarkische Bank is the third largest bank in Croatia and a long-standing partner of the EBRD. To date, the EBRD has invested 3.7 billion euro ($4.2 billion) through 201 projects in the country.
(1 euro = 7.40289 kuna)