Signet Bank acted as the arranger, helping AS DelfinGroup successfully complete its 5 million euro bond issue.
On July 9, 2021 Latvian financial services company AS DelfinGroup has successfully issued bonds via private placement in the amount of 5 million euros with an annual coupon rate of 9.75%. Despite the lowest coupon price in the history of the company the demand for bonds exceeded the size of the issue 1,85 times.
The proceeds from the bond issue will be used to refinance the existing liabilities, which will contribute to a reduction in the company’s total funding costs.
We are delighted with the successful bond issue. The high demand for DelfinGroup bonds from professional investors confirms the trust and support to our business strategy, as well as the company’s corporate governance. This bond issue marks a new chapter in the history of the company, as our bond coupon rate has dropped significantly into a single digit territory. Currently we are pursuing a new milestone – be fully ready for an initial public offering of shares (IPO) on the Nasdaq Riga stock exchange in the second half of this year. We remain focused on stability and the implementation of our long-term strategy.
Chairman of the AS DelfinGroup Management Board Didzis Ādmīdiņš
With this private bond issue, we have significantly improved our bond financing structure, which inter alia includes the concept of negative pledge. This concept ensures that the bond issue will not be secured by the company’s assets, but by a commitment not to pledge assets or to pledge them to a certain amount. The pledge according to the allocated financing will be intended only for loans from a bank or mutual lending platform. This pledge concept is widely used in bond issues, it is understandable and provides an opportunity to easily refinance.
Kristaps Bergmanis, Member of the Management board and CFO of DelfinGroup
Despite the lowest coupon price in the history of AS DelfinGroup, investors have welcomed the offer and the total demand for bonds was 9.26 million euros. Private investors constituted 65% of the total issue size with the remaining 35% subscribed by institutional investors.
The bond issue arranged Signet Bank AS.
DelfinGroup is a great example of how a company with proactive communication with investors, regular and detailed publication of financial reports, gradual improvement of internal processes, combined with a stable business, can significantly reduce its long-term financing rate. Presence in the capital market, like any business relationship, must be seen in a multi-year perspective, so the biggest gains are often to be expected in the long run.
Roberts Idelsons, Chairman on the Management Board of Signet Bank AS
AS DelfinGroup is a licensed financial services company founded in 2009 and represents the brands Banknote, VIZIA, and Rīgas pilsētas lombards (Riga City Pawnshop). The company employs 277 professionals in 92 branches operating in 38 Latvian cities. DelfinGroup is a member of the Latvian Chamber of Commerce and Industry and the Latvian Association of Alternative Financial Services and has received the Gold Level status of the State Revenue Service cooperation programme. DelfinGroup core services are retail sale of pre-owned goods in branches and online, pawn loans, consumer loans, and loans specifically designed for people at retirement age. DelfinGroup bonds are listed on the Nasdaq Riga First North bond list. In 2020, the company’s revenue was 23.7 million euros, the loan portfolio reached 34.7 million euros, EBITDA increased to 9.3 million euros and profit before taxes reached 4.6 million euros. DelfinGroup estimated taxes for 2020 are 3.42 million euros.
About Signet Bank AS
The bank was founded in 1992 with the original name Latvijas Biznesa banka. Since 2013, the strategy of Signet Bank has been focused on servicing entrepreneurs and their companies, with an emphasis on the quality of customer capital service and the structuring of investment projects. The majority shareholders of Signet Bank are a group of Latvian and international investors, which includes SIA Hansalink, SIA Fin.lv and Signet Acquisition III.