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LHV Bank Issues 250 million EUR of Covered Bonds at 0.12% yield

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AS LHV Pank completed today the inaugural issue of 250 million euros of covered
bonds with five years maturity. The covered bonds were issued with the goal of
diversifying the bank's funding structure and reducing funding costs. The
covered bonds will be listed on Euronext Dublin.

The covered bonds backed by Estonian residential mortgage loans were offered to
European institutional investors. In total 28 investors participated in the
offering and the issue was 1.9 times oversubscribed. Out of total order book
41% was received from central banks and international institutions, 29% from
institutional investors in Germany, Austria and Switzerland, 19% from Nordic
investors and 11% from institutional investors in other countries. The covered
bonds were issued at a spread of 40 basis points over the mid-swap rate. Total
re-offer yield of the covered bonds was 0.12%. The covered bonds will be listed
on Euronext Dublin presumably within one week and the expected rating from
Moody's Investors Service Ltd is Aa1.

"We are glad that LHV's inaugural issue of covered bonds was so well received by
investors. The issuance of covered bonds in the amount of 250 million euros is a
step towards longer term and more diversified funding structure for LHV. It
enables us to refinance short term deposits raised from deposit intermediation
platforms with longer term funding and at a lower cost. Mortgage loans are a
long term product which require a stable source of funding. In the longer term,
lower funding costs for the bank also translate into more beneficial funding for
our clients", commented Erki Kilu, the Chairman of the Management Board of LHV
Pank.

"It was an inaugural bond transaction on international markets for LHV Pank.
Wide investor interest in the covered bond issue demonstrates the strong
standing of LHV Pank, the Estonian economic environment and the Estonian
residential mortgage market among investor community. The provisional credit
rating of the covered bonds Aa1 from Moody's Investors Services is also an
indication of high quality and very low credit risk of the covered bonds. We
intend to be back in the market for more issues of covered bonds in the
future," added Kilu.

LHV started issuing residential mortgage loans in 2016. Based on the
recommendation of the Estonian Financial Supervision Authority, the European
Central Bank granted to LHV Pank an additional authorisation to issue covered
bonds on March 18, 2020. Moody's assigned on May 5, 2020 a provisional credit
rating of (P)Aa1 to the covered bonds. The Base Prospectus of LHV's Covered Bond
Programme was registered on May 19, 2020. The Estonian Covered Bonds Act took
effect in March 2019.

Information on LHV's covered bonds is available at:
https://investor.lhv.ee/en/covered-bonds/

LHV Pank is the third largest bank in Estonia. LHV Pank is 100% owned by LHV
Group which is listed on Nasdaq Tallinn. In addition to banking services, LHV
Group includes the asset management company LHV Varahaldus. LHV Group employs
over 460 people. LHV's banking services are used by nearly 219,000 clients, and
pension funds managed by LHV have nearly 178,000 active investors.


Priit Rum
Communication Manager
Phone: +372 502 0786
Email: [email protected] (mailto:[email protected])