Vilniaus Bankas borrowing on the cheap

  • 2004-07-01
  • Baltic News Service
VILNIUS - Vilniaus Bankas, which just completed a 100 million litas (29 million euro) placement of one-year papers, announced that it would launch a new bond issue. The bank has already addressed the securities commission over the registration of two-year bonds, the value of which might reach 50 million litas.

According to the SEB-owned bank, the bonds would bear an annual yield of 3.2 percent, or 25 basic points above the yield of two-year government securities on the secondary market, said Jonas Irzikevicius, director of Vilniaus Bankas' treasury and finance market department.
The securities commission is expected to register the issue the coming week.
In January VB Mortgage Bank, the mortgage subsidiary of Vilniaus Bankas, placed a 100 million litasbond with a yield of 2.9 percent. In June 2003 the bank placed its first bond issue worth 15 million litas under the yield rate of 3.1 percent.
Audrius Smaliukas, VB Mortgage Bank vicepresident, could not confirm whether the bank could launch a new issue in the nearest future. He admitted that the bank intended to observe investors' reaction to the mortgage bond issue by Nord/LB Lietuva.
Nord/LB Lietuva, Lithuania's third-largest commercial bank, controlled by Germany's Nord/LB, launched an issue of mortgage bonds worth 50 million litas at par on June 17. The three-year issue, carrying a floating interest rate, was the first of its kind in Lithuania's banking history.
Vilniaus Bankas announced a net profit of 25.7 million litas for the first quarter of 2004, a decline of 1.2 percent from the same period last year. The bank's group projected its assets would rise to 10 billion litas this year.