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Deal 5: IuteCredit Head of Legal Kadi Raudsepp on EUR 75 Million Bond Issuance

Deal 5: IuteCredit Head of Legal Kadi Raudsepp on EUR 75 Million Bond Issuance

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On October 18, 2021, CEE Legal Matters reported that Lextal has advised Estonian financial technology group IuteCredit on its EUR 75 million senior secured corporate bonds issuance. CEE In-House Matters spoke with Kadi Raudsepp, Head of Legal & Compliance at IuteCredit, to learn more about the matter.

CEEIHM: To start, please tell us about IuteCredit and its history.

Kadi: IuteCredit was established initially in Moldova in 2008, where the Estonian original founders of the company formed a start-up that gave loans to individuals, the majority of whom had no bank account. The start-up turned to be a huge success, shortly after the start of the business, the first investors joined, which eventually enabled to company to grow its business in a very short time and expand the activities also to other countries in the Balkan region. The company has been profitable since the beginning of its operations. The name "Iute" represents nicely our mission and vision (English translation: "spicy“ and "fast“). Today IuteCredit has over 200,000 active customers in Moldova, Albania, North Macedonia, Bulgaria, and Bosnia and Herzegovina and a balance sheet of EUR 100 million. We also raised capital through publicly-traded bonds that are listed on the Frankfurt Stock Exchange and on the Nasdaq Tallinn Stock Exchange.  

CEEIHM: The company recently issued EUR 75 million in senior secured corporate bonds. Why did you opt for this route to secure financing?

Kadi: First of all, I would like to say that we are very proud and humble of the trust we got from the retail and institutional investors with our latest bond offering. The initial plan was to issue up to 500,000 bonds in the denomination of EUR 100, but, as the offering was oversubscribed by more than EUR 35 million, we decided to increase the volume to 750 000 bonds. IuteCredit has issued bonds in 2019 as well and listed them on the Frankfurt Stock Exchange, but this offering was not made available to retail investors. As we needed additional funding to support our growth, we decided to make another bond offering, but this time we also wanted retail investors to be able to take part in the great investment opportunity, including the retail investors in Estonia. We had to go quite a way to be able to list the bonds both on the Frankfurt Stock Exchange as well as on the Nasdaq Tallinn Stock Exchange – something that no company had ever done before, but the journey of which was very educative and exciting for all the related parties, I believe.

CEEIHM: And what are the funds intended for?

Kadi: The bonds were issued mostly for general business purposes, which includes the financing of our growth in current and future markets as well as potential acquisitions.

CEEIHM: What was Lextal's mandate on the issuance – how did you split the legal work between your in-house legal team and your external counsel?

Kadi: We worked with Lextal hand-in-hand pretty much on everything related to the bond offering. The split of the work was more organic and our external counsel worked with us as being part of our in-house legal team. Thank you Kristi Sild for the great work!

CEEIHM: And why did you opt for Lextal as your legal advisor on this issuance?

Kadi: Lextal is actually our long-time partner and as we only have great experiences with working with them, it wasn't even a question of who to involve in this project. They have a great and reliable team.

Originally reported by CEE In-House Matters.