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IFC invests 75 mln euro ($88.9 mln) in Croatia's Erste bank eurobond

Author Annie Tsoneva
IFC invests 75 mln euro ($88.9 mln) in Croatia's Erste bank eurobond Image by: Addy Cameron-Huff.

ZAGREB (Croatia), July 12 (SeeNews) - The International Finance Corporation (IFC), a member of the World Bank Group, said it it is investing 75 mln euro ($88.9 million) in a debut 400 million euro bond issued by Croatia's Erste&Steiermaerkische bank to support the bank's housing portfolio, including green housing loans.

“IFC's support will allow the bank to finance mortgage borrowers in the country, with 40% of the proceeds earmarked for green housing loans. IFC's financing package will further enhance the resilience of the financial sector and promote a dynamic domestic corporate bond market by increasing the diversity in instruments offered by Croatian entities,” IFC said in a statement published on its website on Friday.

Erste & Steiermaerkische Bank issued the senior preferred bond maturing in 2028 at the end of June. The bond is callable after six years, it has annual coupon of 0.75% and yields 0.835%. It will be traded on the Vienna bourse.

The bond issue will also help the Croatian bank meet the European Union's minimum requirement for own funds and eligible liabilities (MREL), being only the second issuance of such bonds in Croatia.

"IFC strategy in Croatia aims to help the country leverage private sector financing as it implements its green transition. In line with our strategy, we are glad to partner with Erste Bank to impulse the growth of the climate financing market, green mortgages in particular," Ary Naim, IFC's regional manager for central and southeast Europe, said in the statement. "Further, the newly created market for MREL instruments will bolster the country's financial system, improving its resilience and helping ensure sustainable economic growth." according to him.

Erste bank is part of Austria's Erste Group.

($=0.8434 euro)

Erste&Steiermaerkische Bank d.d. is among the biggest banks in SEE, for more reference take a look at Top 100 banks