Bonds Investment Programme
HBOR may participate in bond issues that contribute to economic development, where the funds can be used to finance investments, working capital, purchase of shares in a domestic or foreign company, or general business needs (general purpose).
1. Eligible INSTRUMENTS
- Corporate bonds: long-term debt securities of private and private sector issuers
- Minibonds1: long-term debt securities (a type of corporate bond), issued by micro, small and medium-sized enterprises (SMEs)2, and Mid-caps and
- Municipal bonds3: long-term debt securities issued by local and regional government units LRGUs4
1 In case of minibonds, the investment is carried out exclusively with the participation of the Issuing agent as an investor.
2 Pursuant to the Commission Recommendation 2003/361/EC of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises (SL L 124, 20.5.2003):
• medium-sized enterprise employs fewer than 250 employees, and has an annual turnover not exceeding EUR 50 million and/or annual balance sheet total not exceeding EUR 43 million;
• small enterprise employs fewer than 50 persons and has an annual turnover and/or annual balance sheet total not exceeding EUR 10 million;
• micro enterprise employs fewer than 10 employees and has an annual turnover and/or annual balance sheet total not exceeding EUR 2 million.
• medium-sized enterprise employs fewer than 250 employees, and has an annual turnover not exceeding EUR 50 million and/or annual balance sheet total not exceeding EUR 43 million;
• small enterprise employs fewer than 50 persons and has an annual turnover and/or annual balance sheet total not exceeding EUR 10 million;
• micro enterprise employs fewer than 10 employees and has an annual turnover and/or annual balance sheet total not exceeding EUR 2 million.
3 The rules for municipal bonds apply accordingly to bonds issued by companies owned or majority owned by LRGUs.
4 Local and regional government units - municipalities, cities, counties
2. Financial intermediaries (Issuing agents)
An Issuing agent is a financial institution, i.e. a commercial bank or investment company, engaged by the issuer to structure and implement the bond issue.
3. Issuers (Final beneficiaries)
Eligible issuers
- are private and public sector entities:
- micro, small and medium-sized enterprises (SMEs), Mid-caps and large entities
- LRGUs
- companies owned or majority-owned by LRGUs and/or the Republic of Croatia
- with headquarters in the Republic of Croatia and performing the majority of their activities in the Republic of Croatia
- operating at least 3 years (except LRGUs and companies owned or majority-owned by LRGUs)
- no account blocking in the last 6 months
4. Share of HBOR in issue
- HBOR participates in the issue as co-investor under market conditions and pari-passu in relation to other investors:
- Corporate bonds: up to 1/3 of issue value
- Minibonds: up to 50% of issue value (maximum EUR 12.5 million)
- Municipal bonds: up to 50% of issue value
5. Purpose of funds
- Funds are intended for financing investments, working capital, purchase of share in domestic or foreign company or general business needs, in accordance with the terms and conditions determined in the issuing documentation.
- It is not allowed to use funds for the payment of dividends, share of profit, repayment of loans or covering of operating losses.
6. Maturity
- Corporate bonds: in accordance with the terms and conditions of issue
- Minibonds: generally, up to 7 years
- Municipal bonds: generally, up to 15 years.
7. Collaterals
- In accordance with the issuing documentation (prospect or information document).
8. Non-eligible issuers
- Non-eligible issuers are those:
- that do not meet the criteria from the General Eligibility Criteria of the Croatian Bank for Reconstruction and Development
- that are subject to bankruptcy proceedings, previous bankruptcy proceedings, pre-bankruptcy proceedings or that are in liquidation proceedings
- that have material5 liabilities due and outstanding to HBOR
- that have tax debt towards the state
- that are not acceptable from the aspect of preventing money laundering and terrorist financing, and restrictive measures
5Materiality threshold is defined pursuant to the Commission Delegated Regulation (EU) 2018/171 on Supplementing Regulation (EU) No. 575/2013 and the Decision on Implementing Regulation (EU) No. 575/2013 in the part relating to valuation of assets and off-balance sheet items as well as calculation of regulatory capital and capital requirements.
