AS LHV Group Senior preferred bonds

Overview
Project Summary Document
Environmental and Social Documentation
Procurement
Complaints

Overview

In May 2024, the EBRD invested EUR 22 million in 4NC3 senior preferred bonds issued by AS LHV Group ("LHV"), the largest domestic financial group in Estonia, as part of its EUR 300 million public issuance which was listed on Euronext Dublin.

Project ID 55283

Status Signed

Location

Estonia

Business Sector

Financial Institutions

Notice Type

Private

Project timeline

Exploratory
Passed Concept Review
Passed Structure Review
Passed Final Review
Board Approved
Signed
Implementing
Completed

Company Contact Information

Ülar Kiisla
ylar.kiisla@lhv.ee
+372 5743 2271
https://www.lhv.ee/en
Tartu mnt 2, 10145, Tallinn

Project ID 55283

Status Signed

Location

Estonia

Business Sector

Financial Institutions

Notice Type

Private

Environmental Category

Approval Date

24 Apr 2024

Disclosure date

30 May 2024

As permitted by paragraph 2.6 of Section III of the Access to Information Policy, disclosure of this PSD was deferred in accordance with paragraph 1.4.4 of the Directive on Access to Information.

AS LHV Group Senior preferred bonds (Estonian) (PDF, 0.14MB)

Project description

Project objectives

The project supports the resilience and regulatory compliance of the largest domestically-owned financial group in Estonia and contributes to capital market development. The project also delivers on the Bank's green agenda and national green economy priorities for Estonia.

Transition impact

ETI Score:62

ected transition impact of the project stems from its contribution to the Resilient and Green transition qualities.

The project will support the Resilient transition quality by contributing to the resilience of the largest domestically-owned financial group in Estonia to market or regulatory shocks, supporting LHV in maintaining its loss absorption capacity and facilitating its regulatory compliance. The project will also contribute to capital market development by facilitating continuous capital market issuances by local banks.

The Green transition quality is underpinned by the green use of proceeds: the project will support the Bank's GET approach in Estonia through LHV's allocating 150% of EBRD's investments to GET-eligible projects.

Client information

AS LHV GROUP

AS LHV Group is the largest domestic financial group in Estonia with total assets of EUR 7.1 billion as of YE2023. AS LHV Group operates as a financial holding company, consolidating several subsidiaries: banking entities in Estonia and the UK as well as asset management, non-life insurance and payment subsidiaries. The Group has been listed on the Tallinn Stock Exchange since 2016 with market capitalisation of EUR 1.1 billion as of March 2024. The Group is rated Baa3 by Moody's.

EBRD Finance Summary

EUR 22,000,000

Total project cost

EUR 300,000,000

Additionality

The project continues to support LHV through volatile global capital markets with unpredictable investor demand, especially valid for issuers from the Baltic countries with their close proximity to the area of heightened geopolitical risk. The project also benefits from non-financial additionality by supporting LHV's green agenda through the promotion of green projects financing in line with EBRD's GET eligibility.

Environmental & Social Summary

Categorised FI (2019 ESP). AS LHV Group and its banking subsidiary AS LHV Pank are existing clients of the EBRD. LHV is in compliance with the EBRD's Performance Requirements 2, 4 and 9 and will be required to continue to comply with these PRs, apply the E&S Exclusion List and Referral List to the allocation of EBRD proceeds in the bond and make sure that no high risk and no Category A projects are financed through this instrument. Furthermore, LHV will be required to continue to implement EBRD's applicable E&S Risk Management Procedures and continue to submit annual environmental and social reports to the EBRD. Any potential renewable energy projects financed through the various issuances will need to follow the E&S Eligibility Criteria for hydro, wind, solar, bioenergy and geothermal projects, as applicable. Any potential solar sub-projects would be managed in line with the EBRD's Management Approach for Solar Supply Chain Risk Management and any subsequent guidance developed under that approach. The partner bank will continue to report on E&S performance of the operation and compliance with the ESP annually to the Bank.

Technical Cooperation and Grant Financing

None

Company Contact Information

Ülar Kiisla
ylar.kiisla@lhv.ee
+372 5743 2271
https://www.lhv.ee/en
Tartu mnt 2, 10145, Tallinn

PSD last updated

30 May 2024

Understanding transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with the EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and its associated Environmental and Social Requirements (ESRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”. The ESP and the ESRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation, and to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about the environmental and social (E&S) performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD also requires its clients to disclose information, as appropriate, about the risks and impacts of projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and compliance

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all of the Bank's activities in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The EBRD believes that identifying and resolving issues in the project assessment and approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts andhelps to monitor integrity risks in projects post-investment.

OCCO is further responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, either within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. OCCO will follow-up all matters reported. It will review all matters reported. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP, which entered into force on 1 January 2025, sets out how the EBRD discloses information and consults with its stakeholders to promote better awareness and understanding of its strategies, policies and operations. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD enquiries form.

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (for example, through the client’s project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the mechanism is: to support dialogue between project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or the project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate and how to submit a Request for review. Alternatively, contact IPAM by email at ipam@ebrd.com for guidance and more information on IPAM and how to submit a request.

Environmental and Social Documentation is not available for this project.

Selected procurement notices related to this project may be shown below. Further procurement opportunities related to this and other projects, if available, maybe be viewed in the EBRD Procurement Portal.

The EBRD's Environmental and Social Policy (ESP), Access to Information policy (AIP) and Project Accountability Policy (PAP) enable sound and sustainable development in its projects. The Independent Project Accountability Mechanism (IPAM) deals with complaints about environmental, social and disclosure matters related to the Bank’s investments.

No complaints about this project have been made so far.

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AS LHV Group Senior preferred bonds

Overview

Project timeline

Company Contact Information

Project description

Project objectives

Transition impact

Client information

EBRD Finance Summary

Total project cost

Additionality

Environmental & Social Summary

Technical Cooperation and Grant Financing

Company Contact Information

PSD last updated

Understanding transition

Business opportunities

General enquiries

Environmental and Social Policy (ESP)

Integrity and compliance

Access to Information Policy (AIP)

Independent Project Accountability Mechanism (IPAM)