Vilniaus Bankas issues equity-linked bonds

Dec 09, 2004
Baltic News Service

VILNIUS - Vilniaus Bankas has announced the successful completion of a 20 million litas (5.8 million euro) equity-linked bond issue, the first of its kind in Lithuania.

Vilniaus Bankas, which is the country's largest bank by assets and owned by the Swedish financial group SEB, said private individuals purchased 86 percent of the bond issue.

"We anticipated that this new investment instrument would attract considerable interest in the market, but its popularity has surpassed our expectations," said Vykintas Misiunas, director of the bank's treasury and financial market department.

The return on the bond is linked to three stock indexes: the U.S. S&P 500, the EuroStoxx 50 and the Nikkei 225. Vilniaus Bankas explained that the equity-linked bond combines the advantages of two types of securities, allowing customers to indirectly invest in the international equity market while preserving their initial investment.

He said 40 percent of the issue was bought in the capital of Vilnius, 18 percent in Kaunas and 9 percent in Klaipeda. Transactions worth 10,000 litas accounted for the largest percentage of all transactions, at 15 percent. The average value of transactions comprised 20,000 litas.

The Vilniaus Bankas Group has raised a total of 285 million litas through bond issues since 2003 and currently holds a 25 percent share of the domestic debt securities market.

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