Romanian state-owned CEC Bank raised 300 million euro through a bond issue that was more than twice oversubscribed, the 160-year old lender announced on Friday (Nov. 22, 2024).
The senior non-preferred, euro-denominated bonds were issued under the bank’s euro medium-term note (MTN) programme and were approved by Luxembourg’s financial market regulator (CSSF) following the update of the base prospectus on Nov. 18, 2024.
Strong demand from international and local investment funds, pension funds, banks, as well as asset managers and private banking managers, allowed the final coupon rate to be set at 5.625%, down from an initial indicative value of 6%. The peak value of orders placed reached more than €800 million.
Fitch Ratings on Nov. 19, 2024 had assigned CEC Bank S.A.’s (CEC; BB/Stable/bb) “upcoming senior non-preferred (SNP) issuance a ‘BB(EXP)’ expected long-term rating” the international credit agency said in a Rating Action Commentary.
CEC bank said it will request the notes’ listing on the Luxembourg and Bucharest stock exchanges.
The bonds are also intended to be classified as eligible for the Minimum Requirement for Own Funds and Eligible Liabilities (MREL), the bank said.
The lender has mandated Erste Group Bank A.G. and ING Bank N.V. as Joint Bookrunners and Co-Arrangers of the bond issue, while BT Capital Partners acted as Co-Manager. Dentons acted as legal advisor, while Erste Group Bank A.G. and ING Bank N.V. were advised by Clifford Chance, through their offices in Bucharest and Frankfurt.
In the first half of 2024, CEC Group reported a net profit of RON 279.8 mn in the first half of 2024, of which the Bank’s registered net profit was RON 269.5 mn. Over 34,000 new loans were granted during 1H 2024, with a cumulative value of approximately RON 5.8 bn.
Founded in 1864 in Bucharest as Casa de Economii si Consemnatiuni (Deposits and Consignments House), CEC is the longest established financial institution in Romania. In 1996, Law No. 66 reorganized CEC as a joint-stock company with the Finance Ministry as its sole shareholder.
The lender was re-branded as CEC Bank in 2008. Starting 2019, CEC Bank is going through an extensive process of transformation, modernisation and growth. Since March 2022, CEC Bank is rated by Fitch Ratings. CEC currently has the most extensive national network, with more than 1,000 branches and territorial units and assets of RON 93.23 billion (up 35% year on year, at the end of H1 2024 ).
CEC Bank at a glance
Founded: 1864 Headquarters: Bucharest Branches: over 1000 Net profit: RON 279.8 mn Assets: RON 93.23 billion (H1 2024)
