OREANDA-NEWS. December 14, 2012. Latvenergo AS made a presentation for institutional investors, during which confidence was gained about high level of interest towards the upcoming issuance of notes. Presentations will also take place in Lithuania and Estonia in the coming days. The issuance of notes on the primary market will happen already by the end of the year, after evaluating the interest of investors. Thus, Latvenergo AS will be the first state company to issue notes.

In order to issue notes on the primary market and evaluate the interest of institutional investors, thereby determining the value and term of the securities, today Latvenergo AS made a presentation to Latvia’s largest institutional investors. During the presentation, the investors were introduced with the Group’s operational and financial indicators, which affirm the stability of the business. Since the base prospectus of the issuance of notes is available publicly, the level of interest of the investors is already high not only in Latvia but also in the neighbouring countries – Lithuania and Estonia. After the presentations, the final terms of the issuance will be set, including the price of the notes, the amount of the issuance, the maturity date and the yield range. Zane Kotane, Member of the Board of Latvenergo AS: “Although the terms of the specific issuance will be confirmed only shortly before the day of issuance, it is clear already that there is also substantial interest from investors of neighbouring countries, which means that the first part of the issuance will be in euro. However, this does not limit the possibility to issue the following parts in Lats should the interest of investors change.”

The issuance of Latvenergo AS notes on the primary market will take place already by the end of the year. In the secondary market, when the notes will be purchasable by any resident of Latvia through a credit institution or an investment broker company, they will be offered within three months.

By issuing notes, Latvenergo AS will be the first state capital company that has chosen such an option for attracting funding. By the assessment of the Ministry of Economics of the Republic of Latvia, such an option has several advantages. “It is the opinion of the Ministry of Economics that the issuance of notes to attract funding is a good alternative to bank loans for Latvenergo as a strong state capital company. It is also a significant step forward for the introduction of good governance principles in state capital companies, which is one of the goals of the Ministry of Economics – to improve the management of state capital companies by making it more effective and transparent. It is also important to point out that the issuance of notes will facilitate the development of the financial instruments market in Latvia,” notes Juris Puce, State Secretary of the Ministry of Economics of Latvia.

Aris Zigurs, Chairman of the Board of Latvenergo AS, emphasises the importance of the issuance of notes for achieving the goals of the Group: “The Latvenergo Group has ambitious goals for growth, continuing to reinforce the position of a pan-Baltic business. The funding acquired as a result of the issuance will be used for financing the capital investments programme of the Latvenergo Group – maintenance and modernisation of the generation, distribution and transmission network assets, such as the Kurzeme Ring project and the reconstruction of the hydropower units of Daugava HPP. Therefore it is a significant event not only to the energy company but also to everyone involved directly or indirectly. We are the first state capital company that displays maturity by issuing notes to implement our investment programmes, and I hope that our example will encourage other state-owned economic operators, as this is a step that also facilitates the development of the economy of Latvia.”

Organisation of the issuance of notes and relationships with the investors are entrusted to SEB Bank that developed the base prospectus for the issuance of notes together with the Management Board of Latvenergo AS. As the securities market develops in Latvia, entrance of a powerful issuant is also a positive signal to other companies to choose new instruments for the attraction of funding. The cooperation of SEB Bank and Latvenergo is important for three reasons, points out Ainars Ozols, President of SEB Bank: “Firstly, it is the first issuance of corporate notes in Latvia in a long while, and it is an honour and a highly favourable appraisal from Latvenergo to select SEB Bank to assist with the preparations for the issuance of Latvenergo’s corporate notes. Our task is to help the enterprise to ensure all the technical and legal processes, as well as to attract investors by preparing an offer that is most suitable for the body of investors. Secondly, the decision to enter the financial market and attract other funding than the usual bank investment loans is a good signal that there is a high level of trust in the market towards Latvenergo. Thirdly, it is also a unique experience for us, as the long-term goal of SEB Bank is to support the business environment of Latvia not only with financing in the form of loans but also by becoming an acknowledged consultant for financial deals that require broader competence and experience.”