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Subscribe to LHV’s subordinated bonds and help to increase the share of Estonian capital on the domestic financial services and European financial service providers’ market.

Subscribing to bonds will begin at 10.00 on 5 June 2019 and will end at 16.00 on 21 June 2019. The bonds will be issued on 25 June, 2019 or on a date close to it and listed on the stock exchange on 27 June, 2019 or on a date close to it.

LHV announces a public offering of up to 15,000 subordinated bonds. In case of oversubscription, LHV reserves the right to increase the volume of the offering and to issue up to 5,000 additional subordinated bonds. The maximum volume of the offering is thus EUR 20 million.

Subscribing to LHV subordinated bonds is public. We have made this possible for the clients of all banks. If you are a customer of LHV, log in and subscribe. If you are the customer of another bank, log into your Internet bank and subscribe to bonds there or visit a branch of your bank and ask an adviser to help you.

LHV subordinated bond programme

This is the second issue in the subordinated bond programme in which we plan to issue a total of EUR 45 million in subordinated bonds. The bonds will be issued with a maturity period of 10 years with a potential early redemption date after 5 years. The bonds will be listed on the Nasdaq Tallinn stock exchange. The volume of the first issue in autumn 2018 was EUR 20 million.

LHV subordinated bond issue

Issue size

The size of issue of LHV subordinated bonds will be EUR 15 million. In the event of oversubscription, the issue size may be increased to EUR 20 million.

Subordination of bonds and key risks

The subordination of LHV subordinated bonds means that in the event of the liquidation or bankruptcy of LHV, any claims resulting from those bonds will only be settled after all unsubordinated claims (for instance, deposits received, loans taken or obligations towards staff and suppliers) have been settled in full. When claims are settled, LHV shareholders will rank behind the holders of subordinated bonds. Among other risks specific to the LHV subordinated bonds, the bail-in risk should be considered, which could materialise if LHV became subject to a recovery and resolution plan in the event of insolvency and other difficulties.

Face value EUR 1000

The face value of an LHV subordinated bond is EUR 1000. The subscription price of EUR 1004.83 includes interest accrued by the value date, which the investor will recoup together with the quarterly interest payment on 28 August 2019. We will make this investment opportunity available to all investors in Estonia. While bond investments are often targeted solely towards large or institutional investors, we are making our offer specifically to retail investors in Estonia.

Interest 6% per year

LHV subordinated bonds constitute fixed-term equity. As a result, we are able to pay their holders interest at a rate higher than normal: 6% per year. Interest is paid on a quarterly basis, enabling customers to receive a regular return on their investment.

Term 10 years

LHV subordinated bonds are a long-term investment. This is an additional issue of bonds being traded on the market with a redemption date of 28 November 2028. LHV reserves the right to redeem the bonds partially or completely starting 28 November 2023. Early redemption of bonds will require the consent of the Financial Supervisory Authority.

Securities account required

During the issue, all Estonian private investors and companies may subscribe to the bonds. A Baltic securities account is required in order to buy bonds.

Listed on the stock exchange

LHV subordinated bonds have been listed under Baltic bonds on the Nasdaq Tallinn Stock Exchange. The investor may buy and sell the bonds freely on a regulated market.

Transparent reporting

LHV is a licensed and highly transparent financial institution. As a public company, we prepare and publish monthly results and quarterly reports with a detailed overview on LHV’s business activity and the risks involved.

LHV is the only company listed on the Baltic Stock Exchange to publish long-term financial forecasts. We are the Nasdaq Tallinn company with the best investor relations.

Best investor relations of the year

Prospectus, terms and conditions

Building Estonian capital together

LHV is the perfect place for growing your money. Subscribe to LHV’s subordinated bonds and help to increase the share of Estonian capital on the domestic financial services and European financial service providers’ market.

Our mission is to help build Estonian capital. We have turned LHV into a financial group with a broad investor base that serves the interests of Estonian society and contributes to the development of the local financial system. LHV Bank provides services to Estonian private and corporate depositors and borrowers. Through the UK branch of LHV Bank, we will become a company that exports financial services. LHV Asset Management manages long-term pension investments for people in Estonia and at the same time invests actively in local companies. As an investor of LHV, you will be able to share in this activity and the created value.

LHV is the biggest domestic capital provider in Estonia

Estonian people keep financial assets worth more than EUR 4 billion in LHV. LHV Bank has grown into Estonia’s fourth bank, with LHV Asset Management growing the assets of pension funds that rank second in Estonia in terms of volume. LHV's banking services are used by over 174,000 customers, and more than 177,000 customers have invested into LHV's pension funds. LHV currently employs over 400 people and is owned by more than 5,900 Estonian investors.

Our goal is to become the best financial services provider

We consider ourselves to be innovative and want to provide our customers with simple and convenient financial services. In Estonia, we define ourselves as a fast-growing local home bank offering full services. We focus on active and independent customers with an enterprising mindset. Outside Estonia, we are active in the UK through a branch of LHV Bank, where we want to be the most reflective financial services partner to international service providers. LHV Asset Management aims to provide fund unit holders with the best long-term rate of return.

Unique investment opportunity

In order to support the goals of LHV, we will arrange a subordinated bond issue within the previously approved bond programme.

We can utilise capital raised this way as part of our equity. Growth in business volume requiring equity is mainly based on lending operations. Under the rules established for banks, for every loan issued we have to hold a certain amount of equity, which may consist of either equity capital or subordinated bonds.

This is a bond issued as part of the bond programme, offering a similar return as the bonds issued in autumn 2018. Thus, the subscription price includes the interest that had accrued by the value date. The investor will receive the accrued interest back at payment of interest to take place on 28 August 2019.

To take part in the retail offering, the investor must have an Estonian address registered in the Nasdaq CSD system or, in the case of a legal person, their registry code in Nasdaq CSD must have been issued by the Estonian Commercial Register. These data generally are transferred automatically by the bank that manages the account.

The investment account system can be used for bonds. In this case, interest will be paid in the gross amount. LHV should be notified regarding the investment account. You can do this in LHV Bank by accessing the menu Accounts and limits > Active accounts > pencil icon and tick the checkbox "Investment account". If there is already a checkmark there, we will automatically take this into consideration for the next interest paid on LHV bonds.

LHV Bank clients cannot use the Margin Loan for subscribing to the LHV bond.

Subscribe to LHV’s subordinated bonds and help to increase the share of Estonian capital on the domestic financial services and European financial service providers’ market.

If you are not a customer of LHV, log into your Internet bank and subscribe to bonds there or visit a branch of your bank and ask an adviser to help you.

The information on this page is an overview of the subordinated bonds issue, and its terms and conditions. The information must not be treated as investment advice. To make an informed decision, please review the base prospectus, its annexes and the final terms of the offering as an entirety on the LHV Group website (investor.lhv.ee), and if necessary, seek advice from an expert. The bonds are offered publicly in Estonia only.