Avarda Bank plans AT1 bond issuance and existing bond redemption

Avarda Bank AB (publ) has initiated a process to potentially issue Additional Tier 1 (AT1) bonds with an expected value of SEK 200 million. The proceeds from this contemplated bond issuance are intended for general corporate purposes, including the refinancing of the bank's existing SEK 100 million AT1 bonds.

As per regulatory requirements for financial institutions, banks must maintain sufficient capital to absorb potential losses and ensure financial stability. AT1 instruments are a form of debt that can be converted into equity or written down under specific conditions, making them a key tool for banks to bolster their capital base.

Nordea Bank Abp has been appointed as the sole bookrunner for the potential bond issuance. The execution and timing of the issuance are dependent on prevailing market conditions, with the bank anticipating it may occur in the near future.

The bank stated that these actions are part of its ongoing strategic financial planning and aim to optimize its capital structure. The objective is to ensure the bank's continued operational efficiency and support its long-term growth objectives in the current economic climate.