The commission reported that 25,000 Latvijas Unibanka three-year bonds were registered as salable with a fixed annual rate of 6.5 percent on Jan. 18.
The bank said that the bonds were issued in order for the bank to acquire medium term resources in the national currency, the lat.
It said the bond issue could invigorate the Latvian capital market and noted that this kind of bond is a new comer to the Latvian securities market, as no companies have issued public bonds before.
"These bonds offer a good alternative to bank deposits and are a good way of diversifying risks," said Boris Epsteins, financial analyst at the Baltic News Service.
He predicted the main investors would be pension funds, banks and insurance companies.
Haralds Burkovskis, Unibanka's press secretary, told The Baltic Times that the bank expects some private persons to invest in the bonds as well. For the bank the offering is a safe way of attracting resources as investors can refinance the bonds at anytime by selling them on the market, he said.
The bank reported that the first bonds may become available on Feb. 4, 15 days after the Finance and Capital Market Commission has registered them and will initially be available only at the bank for prices it will specify.
Unibanka did not wish to forecast whether the bonds may be traded at the Riga Stock Exchange.
A Unibanka shareholders meeting last March authorized the bank's board to issue 25 million lats' worth of bonds, but the bank's management decided there was no need to attract additional resources in lats last year.
Unibanka has previously only issued global depository certificates. The bank was prepared to issue 400 million euros' ($353.98 million) worth of eurobonds in 2000 but did not do so because by year's end it had been purchased in its entirety by Sweden's Skandinaviska Enskilda Banken.
"There were other resources available," Burkovskis said.
Latvia's banking specialists said Unibanka's bond issue was a positive trend.
Hansabanka fixed revenue securities dealer Elmars Priksans told BNS the new issue was a highly positive development for the debt securities market because it would increase the market's liquidity and Unibanka was a well known issuer.
He predicted the launch of the bonds would be quite successful, but cautioned that finding local buyers might be difficulties because the largest assets in Latvia are held by banks which already have many business dealings with Unibanka and may not prefer to spread their risks in other directions.
"But there is a question also of whether Unibanka itself wants to offer all the bonds it is registering," he said. Registering bonds does not mean they have to all be sold immediately, he explained.
Parex Bank dealing section's head Leonids Rudermans said Unibanka's placement of the bonds showed the readiness of Latvia's market for new financial instruments.
Unibanka, a part of the SEB group in the Baltics, is the second largest bank in Latvia in terms of assets.
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