23 Aug 2022
NIB invests in MREL-eligible bond purchase in Estonia
NIB is investing EUR 25 million in a EUR 300 million MREL eligible bond issued by the Estonian Luminor Bank AS. The bond will be listed on the Irish Stock Exchange, trading on Euronext Dublin.
This is NIB Lending’s second purchase of a bond eligible under the Minimum Requirement for own funds and Eligible Liabilities (MREL) issued by a financial institution.
Under the regulations of the EU Banking Union, participating banks must meet regulatory targets to be able to absorb losses and restore their capital position, allowing them to perform their economic functions during and after a crisis. MREL represents one of the key tools in enhancing banks’ resolvability.
The proceeds of the issuance will support Luminor’s regulatory compliance, the diversification of its funding base, the increase of its loss-absorption capacity and crisis resilience and promote Luminor’s financing of small and medium-sized enterprises.
“NIB’s MREL bond purchase is part of NIB’s strategy to enhance its client value proposition and developing capital markets. The investment also promotes small businesses financed by Luminor in all the Baltic countries,” says André Küüsvek, NIB President and CEO.
Luminor was formed 2017 through the merger of the Baltic operations of DnB and Nordea. Since 2019, the operations are under one legal entity in Estonia, with operations also covering Latvia and Lithuania. Luminor is majority-owned by a consortium led by private equity funds managed by Blackstone.
NIB is an international financial institution owned by eight member countries: Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway, and Sweden. The Bank finances private and public projects in and outside the member countries. NIB has the highest possible credit rating, AAA/Aaa, with the leading rating agencies Standard & Poor’s and Moody’s.
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