On 9 July 9 2021, Latvian financial service company AS DelfinGroup successfully issued bonds via private placement in the amount of €5 million with an annual coupon rate of 9.75%. The nominal value of a bond is €1 000, and the minimum subscription size was €100 000. The demand for bonds exceeded the size of the issue 1.85 times.
The proceeds from the bond issue will be used to refinance existing liabilities by repurchasing loans on Mintos, which will contribute to a reduction in the company’s total funding costs. It means some of the investors will receive funds in their accounts sooner, as a result of this repurchase. Such fluctuations, including repurchases, of the lending companies exposure are an ordinary part of cooperation. DelfinGroup continues to offer investment opportunities for investors on Mintos.
Chairman of the AS DelfinGroup Management Board Didzis Ādmīdiņš: “We are delighted with the successful bond issue. The high demand for DelfinGroup bonds from professional investors confirms the trust and support for 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 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.”
Kristaps Bergmanis, Member of the Management board and CFO of DelfinGroup: “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 collateral concept is widely used in bond issues, it is understandable and provides an opportunity to easily refinance.”
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. Private investors constituted 65% of the total issue size with the remaining 35% subscribed by institutional investors. The arranger of the bond issue was Signet Bank AS.
Roberts Idelsons, Chairman on the Management Board of 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.”
DelfinGroup, formerly known as SIA ExpressCredit, was founded in 2009 and is the owner company of the loan originators Banknote and VIZIA. DelfinGroup is the second-largest non-bank consumer lender in Latvia. Since its inception, the company has issued €303 million of pawn loans and consumer loans and the client base has reached almost 400 000 customers. In 2020, the company’s revenue was €23.7 million, the loan portfolio reached €34.7 million, EBITDA increased to €9.3 million and profit before taxes reached €4.6 million. Starting from 06.05.2021 there have been changes in the ownership structure and some equity investors overlap with Mintos.