Bonds In September 2022, UAB Eika, the real estate development company, launched a second bond issue of EUR 5 million, raising capital at an annual interest rate of 6%, payable semi-annually. The issue attracted retail investors, who typically invest up to EUR 50,000, and high net-worth investors (HNWIs) with available funds, as well as strong interest from private banking clients, totalling 111 individuals and legal entities.
‘We have a very high level of investor confidence in our group. Even in the current circumstances, Eika can borrow on the capital markets at a similar cost to the first time. Diversified financing helps us to continue developing our planned projects with confidence and to offer more apartments to the Vilnius market in the near future,’ says Domas Dargis, CEO of Eika.
The placement, organised by AB Šiaulių bankas from 8 to 23 September, was carried out on an auction basis, i.e. investors could indicate the interest rate at which they would lend the funds in the range between 5.5% and 6%. The interest rate indications were distributed as follows: EUR 2,967,000 was subscribed at 5.5% (59% of the issue), EUR 1,653,000 at 6% (33% of the issue) and the remaining EUR 380,000 between 5.7% and 5.9% (8% of the issue). Under the auction principle, Eika had the option to issue almost EUR 3 million of bonds at 5.5% or to close the entire EUR 5 million issue by distributing it to all investors at 6%. All investors received the highest interest rate (6%), despite the lower interest rate at the time of application.
‘Eika has taken a further step in strengthening its position on the capital markets. The heightened geopolitical situation did not prevent the successful completion of the placement as investors sought refuge in a period of market turbulence. Clients were impressed not only by the well-known Eika trademark, but also by the possibility to choose their preferred interest rates,’ said Domas Klimavičius, Head of the Investment Services Group at Šiaulių bankas.
The results of Eika’s second issue are similar to the first one, which the company issued in November 2020. At that time, Šiaulių bankas also organised an interest rate auction, where investors could bid between 4.5% and 5% interest. At that time, the entire issue of EUR 5 million was issued at a final interest rate of 5%.
Eika refinanced the first issue in November 2022, when it offered existing investors another two-year loan, but at a higher interest rate of 6%, which was set during the auction of the second issue. The aim was to offer investors in the first issue the same yield as buyers of the second issue.
Key facts about the bond issue
Placement period: 8–23 September 2022
Type of securities: non-convertible fixed-rate ordinary bonds
Issue size: EUR 5,000,000
Interest rate: 5.5%–6%
Interest payment: Every six months (semi-annually)
Duration: two years
Nominal value per bond: EUR 1,000
Please send an email to obligacijos@eika.lt if you wish to view the consolidated financial statements of UAB Eika Group.