“After three years of growth and modernization, CEC Bank has successfully attracted private funding through the capital markets. Thus, we can continue the strategy of transforming CEC Bank into a modern and agile bank”, says CEC Bank CEO Bogdan Neacsu.
Other banks are also issuing bonds to meet the Minimum Requirement for Own Funds and Eligible Liabilities (MREL). European standards require banks to ensure an optimal level of MREL eligible funds at all times, which may not be met from customer deposits guaranteed by the Bank Deposit Guarantee Fund.
Under the approved prospectus, CEC Bank may issue several types of bonds (unsecured senior, subordinated or eligible bonds for the minimum own funds requirement and eligible liabilities), up to a ceiling of EUR600 million (or equivalent in other currencies), for two to ten years.
The bank intends to list these instruments on the Bucharest Stock Exchange in the coming weeks. The private placement was subscribed by financial and non-financial institutions and companies and was structured in two tranches. Both the euro tranche, amounting to EUR97.3 million, and the leu tranche, amounting to RON175.35 million, have a maturity of three years.
The bonds issued are senior non-preferred bonds and the two tranches helped the bank raise 11% more than it had expected.
Raiffeisen Bank Romania via its Investment Banking unit brokered CEC Bank’s offering to professional investors.
(English version by Loredana Fratila-Cristescu)