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UPDATE 1 - Serbia's Raiffeisen Banka sells 51.3 mln euro bond

Jun 12, 2024, 6:01:35 PMArticle by Iskra Pavlova
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June 12 (SeeNews) - Serbia's Raiffeisen Banka, a unit of Austria's Raiffeisen Bank International (RBI), said on Wednesday it has placed a four-year bond issue worth 6 billion dinars ($55 million/51.3 million euro), aimed at diversifying its financing sources and maintaining compliance with internal minimum requirement for own funds and eligible liabilities (MREL).

UPDATE 1 - Serbia's Raiffeisen Banka sells 51.3 mln euro bond
Photo: Raiffeisen Banka

The MREL bonds were issued with a call option, which will let Raiffeisen Banka buy back the securities prior to maturity, the Serbian lender said in an e-mailed statement on Wednesday.

In particular, Raiffeisen Banka has sold 300 bonds at 20 million dinars each, equal to their par value. The bonds have an interest rate of 3-month BELIBOR plus 2.50% and will mature on June 6, 2028. BELIBOR is the benchmark rate offered on dinar deposits by Serbian banks in the interbank market.

"This is the first issue of such a financial instrument for Raiffeisen Banka. With the sale of long-term dinar-denominated bonds we attracted the attention of international financial and development institutions to the corporate bonds market in Serbia, which is still in its early growth stage," the head of Raiffeisen Banka's executive board, Zoran Petrovic, said in the statement.

The raised funds will go primarily towards supporting projects aimed at environment protection, strengthening social responsibility and improving corporate management, Petrovic noted.

The securities will be listed and traded on the open market of the Belgrade Stock Exchange, as per the statement.

Out of 20 active banks in Serbia at the end of March, Raiffeisen Banka was the third largest in terms of assets, behind the local unit of Italy's Intesa Sanpaolo - Banca Intesa Beograd (BIB), and OTP Banka Srbija, according to central bank data.

RBI said in May that the after-tax profit of its Serbian unit rose to 71 million euro ($76 million) in the first quarter of 2024 from 46 million euro in the like period of last year.

(1 euro = 117.073 dinars)

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