On September 25, 2024, Banca Transilvania issued 700 million euro of bonds, against investor demand of over 2.5 billion euro. This is the second consecutive time BT has launched a bond issue under its Sustainable Finance Framework.

Orders came from nearly 170 institutional investors, predominantly international (95%). The offering was taken up by 131 investment funds, pension funds, commercial banks, insurance companies and corporates from 28 countries across Europe, the US, Asia and the Middle East. More than 64% of the investors subscribing to BT’s sustainable bonds have ESG objectives in their investment policies.

The proceeds will finance sustainable projects, in line with the eligibility criteria of the Sustainable Finance Framework: supporting SMEs in less developed regions of Romania; improving access to healthcare and education; and green transition initiatives — green buildings, renewable energy projects, transport and organic agriculture.

We are pleased with investor interest in this issue, which once again highlights both the attractiveness of Banca Transilvania and our country’s potential. The yield, number of investors, transaction size and overall demand set new benchmarks for BT.

Ӧmer Tetik
Chief Executive Officer
Banca Transilvania

In the first hour after launch, investor orders topped 1 billion euro, with BT also benefiting from a vote of confidence from two international financial institutions. Supportive market conditions and strong order dynamics resulted in a final coupon of 5.125% per annum, with the yield set around 40 basis points below initial guidance. The bookbuild was completed within hours and, given the strong interest that persisted even after pricing tightened, Banca Transilvania decided to upsize the transaction to 700 million euro.

The bonds mature in 2030, are listed on the Dublin Stock Exchange and are eligible for the minimum requirement for own funds and eligible liabilities (MREL), helping ensure an appropriate level of funds separate from customer deposits, which are guaranteed by the Bank Deposit Guarantee Fund, in line with European banking standards.

The sale was coordinated by J.P. Morgan, Morgan Stanley, Nomura and ING Bank (the latter also acting as ESG adviser). BT Capital Partners, the brokerage company of the Banca Transilvania Group, acted as Co-manager for this issue. Legal counsel were Filip&Company, Freshfields Bruckhaus Deringer LLP, Clifford Chance Badea and Clifford Chance LLP. Deloitte Audit SRL acted as financial auditor, and KPMG Tax SRL as tax adviser.

The first ESG bond issue, also oversubscribed within hours, was announced by Banca Transilvania in November 2023, when it raised 500 million euro.