The volume of the first tranche of bonds will be increased
Nemunaičiai on the left bank of the Nemunas River, is being developed by S3 Business, a company managed by SBA Urban and TABA Invest. Up to EUR 23.5 million in bonds, secured by the project's real estate and the issuer's shares, is planned to be raised for the construction of the Hermanas Class A business centre. The bond issuance was organised by Luminor Bank, with legal advice provided by the law firm Ellex Valiunas.
„We offered investors a promising project with strong shareholder backing and balanced bond terms. There was no shortage of choices on the bond market in May, so we particularly appreciate the confidence investors have shown in our project. Given the high demand, we decided to increase the volume of the first issue from EUR 5 million to EUR 7 million,“ said Kasparas Juška, Head of Investment at SBA Urban.
The first tranche of the issue attracted widespread interest from retail, large and institutional investors. The distribution took place between May 12 and 26. A total of 287 investors purchased the bonds. The majority, 208, were from Lithuania, followed by 31 from Estonia and 48 from Latvia. The average investment amounted to EUR 24,390.
„Well-prepared projects get noticed even amid an unprecedented surge of offerings currently competing for the attention of retail investors in the capital market. Properly structured bond terms and interest rates in line with market conditions are key to success. The participation of institutional investors also confirms the attractiveness of this issue,“ stated Gediminas Norkūnas, Head of Debt Capital Markets at Luminor Bank.
The first tranche of the Hermanas bond issue was launched with a 2.5-year maturity, offering investors a fixed annual interest rate of 8%, payable semi-annually. The bonds are secured by a first-ranking mortgage on real estate and a pledge of the issuer's shares. The loan-to-value ratio must not exceed 75%, with the remaining part of the project financed through shareholder equity.
Construction Progressing Rapidly
Hermanas business centre is scheduled for completion by the end of 2025, with total investments in the project expected to reach up to EUR 35 million.
Andrius Mikalauskas, Head of the Urban LIVE investment direction under SBA Urban, which is developing the Nemunaičiai district, says that the business centre Hermanas is highly anticipated on the market.
„With a limited supply of Class A office space in Kaunas, this project presents a new opportunity to establish operations in the city's fastest-growing district. Construction work on the Hermanas business centre is progressing at an exceptional pace – the main structural works are already complete, and all eight floors of the building have been erected. The general contractor, Veikmės Statyba, has begun installing internal engineering systems and windows, and façade works will commence shortly,“ says A. Mikalauskas.