Arco Vara private bond issue reaches full subscription at record speed

Real estate developer Arco Vara successfully completed a private bond offering in December, issuing two-year bonds with an annual interest rate of 10%, raising a total of 4 million euros.

Kristina Mustonen, CEO of Arco Vara, expressed gratitude to investors for their strong interest and trust in the company. “The 2024 bond issue was almost twice the size of the one two years ago, yet the entire volume was subscribed within just two business days, thanks to purchase options. Therefore, we had to inform many interested parties that the allocation was already fully subscribed,” she explained, emphasizing the high demand for the company’s bonds. Allocation was determined on a first-come, first-served basis.

Arco Vara issued a total of 400 bonds, each with a nominal value of 10,000 euros and an annual interest rate of 10%. Interest payments will be made quarterly. The bonds will be issued on December 13, 2024, with a maturity date on December 12, 2026. On the same day as the new bonds will be issued, the company will redeem its previous two-year bonds, totaling 2.12 million euros, as scheduled.

According to Tiina Malm, CFO of Arco Vara, the bonds were subscribed by 43 investors, including individuals associated with the company’s management board and supervisory council, as well as several institutional investors. Notable participants included Coop Pank AS, Avaron Private Portfolio Fund, Avaron Bond Fund, and Trigon Dividend Fund. CFO confirmed that the bond offering was conducted in compliance with Article 1 of the European Parliament and Council Regulation (EU) 2017/1129.

The funds from the bond issue will be used as equity financing for the Arcojärve development project. This initiative focuses on creating an environmentally friendly and community-oriented lifestyle, offering a modern and integrated living environment along the shores of Lake Harku in the Haabersti district. The project includes the demolition of old buildings, the construction of walking paths and recreational areas, and improving beach accessibility. According to Mustonen, the goal is to preserve and enhance the area’s natural beauty while providing modern amenities for residents and visitors alike.