11.04.2025
Moody’s Ratings today upgraded the ratings of AS LHV Pank’s covered bond program and covered bonds to the highest level, Aaa.
The rating upgrade is supported by strong credit quality of the portfolio, sufficient over-collateralized of the cover pool, and also development of Estonian Covered bond legislation together with increased covered bonds issuance by Estonian banks. LHV uses covered bonds backed by Estonian home loans as one of the sources of loan financing.
"Receiving the highest possible credit rating, the so-called triple A or Aaa, for LHV’s covered bonds enables us to raise funding from international money markets at lower costs and, if necessary, with longer maturities. This in turn gives LHV the opportunity to offer more favourable conditions to its clients for buying a home," said Juhan Peet, Head of Treasury at LHV.
"The growth in the volume of LHV’s home loans has been impressive. Clients appreciate the quality of our service and our operational speed. At LHV, we have been issuing covered bonds since 2020 to finance customer demand, and the bonds have been well received by the markets – the emissions have been oversubscribed multiple times. The highest rating strengthens our position in future issuances and opens the door to investors who only invest in covered bonds with an Aaa rating," Peet added.
The Covered Bonds Act, which allows for the issuance of covered bonds, came into effect in Estonia in 2019. LHV Pank has issued covered bonds on four occasions with a total value of €850 million. LHV’s covered bonds are listed on the Euronext Dublin stock exchange.
More information on LHV covered bonds: https://investor.lhv.ee/en/covered-bonds
LHV Group is the largest domestic financial group and capital provider in Estonia. The main subsidiaries of LHV Group are LHV Pank, LHV Varahaldus, LHV Kindlustus, and LHV Bank Limited. The Group employs more than 1,160 people. As at the end of February, the banking services of LHV are used by 462,000 clients, the pension funds managed by LHV have 113,000 active clients, and LHV Kindlustus protects a total of 174,000 clients. LHV Bank, a subsidiary of the Group, holds a UK banking licence and offers banking services to international fintech companies and loans to small and medium-sized enterprises.
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