Port of Tallinn and Swedbank signed an agreement for issuing bonds in amount up to EUR 80 million with a maturity of 10 years. The bond issue will take place in September 2016 and is subscribed in full by Swedbank. Port of Tallinn will use the funds received from the bond issue for financing partly the ferry project. So far, the ferry project has been financed by short-term loans and by company’s own free cash flow, which will now be refinanced as long-term. For the ferry project it is planned to borrow long-term loan capital up to EUR 124 million in total.
According to Port of Tallinn’s Chief Financial Officer Marko Raid the current bond issue is of remarkable importance for the port as the previous 10-year financing contract with a local bank was signed almost 10 years ago in 2007 and in the meanwhile, during the years of economic crisis, the port has not received a suitable proposal from any local bank offering such a long-term contract with fixed interest margins under suitable conditions.
„Regarding the participation activity and competitiveness of the financing competition held in June I’m pleased to note that the ability of local banking market to offer long-term financing is today recovering to the pre-crisis level,“ added Raid.
According to Swedbank’s Member of the Board and Executive Manager of Corporate Banking Heiki Raadik the cooperation with Port of Tallinn is valued highly. „It is our pleasure to support company’s development. In cooperation with Port of Tallinn it is Swedbank’s pleasure to give our contribution to the development of Estonia,“ said Raadik.
For Port of Tallinn, the current transaction is by volume the largest financing transaction ever. In November next year, when it’s deadline to redeem three debt instruments, Port of Tallinn plans to refinance bonds in an even bigger amount, which is up to EUR 105 million.
The estimated debt burden of Port of Tallinn by the end of 2016 is EUR 250 million.
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