The company announced that collection of orders for subordinated Tier 2 notes maturing in 10 years and callable after 5 years a has been concluded. The subordinated notes are expected to be issued on 19 November 2019 in the aggregate amount of EUR 120m at interest rate of 3.650% p.a.

On 4 November the company announced that it has mandated UBS Investment bank who will together with NLB arrange issuance of its Tier 2 notes. NLB has held a series of fixed income investor meetings across Europe and a series of investor calls between 6 and 8 November 2019. On the base of this NLB has on 12 November opened book to institutional investors that was be closed on the same day after orders were filled. Subordinated notes will mature in November 2029 while they are callable by the issuer in November 2024. Slovenian investors had an allocation advantage. The investors to which note was offered are only eligible counterparties and professional clients. The nominal value of the subordinate Tier 2 notes amounts to EUR 120m. The bond will be listed on Luxembourg Stock Exchange, Euro MTF market and it will be governed by the German law. The settlement is expected to take place on 19 November 2019. The determined fixed rate of 3.650% p.a. will be applied on nominal amount and payable annually. Issue price will be equal to 100% of their nominal amount. On closing of transaction the rate will be reset to the sum of the reference rate, which amounts to 5 year Mid-swap rate and the margin in % p.a. that will be determined.

As a reminder, NLB in May 2019 issued EUR 45m of Tier2 Notes with the same maturity and fixed rate of 4.2%. Margin on this issuance has amounted to 4.159% p.a. To read more about other terms of this transaction please see our previous article on the following link. When we compare rates realized in two transactions, we can conclude that the financing costs have in the meantime decreased for 55 bp.