A&M has acted as Arranger of the first publicly rated securitisation in Lithuania and the Baltic States. Vytis Reno Loans 2025-1 DAC Class A Debt achieved a AAA rating by Fitch and Scope, raising EUR 112 million, the first transaction of this asset class in Europe and the first AAA rating on Nasdaq Baltic.

Client Challenge and Transaction Summary

• ILTE, Lithuania’s national development bank, supports a wide range of development activities across Lithuania, including the provision of soft loan-based financing for multi-apartment building renovations.
• As a development institution, ILTE needs to allocate funding across its many activities and, as such, a strategic solution was sought to increase the availability of term funding.
• A&M was mandated by ILTE to act as Arranger in the first public securitisation in Lithuania. The funds raised will be used to expand the multi-apartment building renovation loans programme.
• ILTE has originated over EUR 450 million of loans as part of the programme since 2015.
• The total size of the portfolio of loans sold to the securitisation vehicle was EUR 160.5 million. The Class A Debt, totalling EUR 112.3 million, amounted to 70% of the portfolio and achieved a AAA rating by Fitch and Scope.
• The transaction is part of ILTE’s Secured Green Standard Bond Framework and achieved a “Good” score by Sustainable Fitch in their Second Party Opinion.
• The issuance is the first listed green bond in the Baltic States to receive the highest AAA credit rating.

A&M’s Solution and Approach

• A historical performance and portfolio assessment process was used to help drive decisions on transaction structure and selection of rating agencies and other third parties involved in the transaction.
• A&M supported the client extensively in this inaugural issuance, across areas including data integrity and quality, internal monitoring and procedures, green bond compliance, local markets infrastructure and external ratings, among others.
• As this was the first securitisation in Lithuania, A&M’s structuring expertise was also crucial in facilitating senior investors investing in their preferred format, with EBRD and NIB investing EUR 50 million and EUR 31 million, respectively, in the Class A Notes and Swedbank investing EUR 31 million in the Class A Loan Notes.
• The final transaction represents the culmination of a comprehensive transformation journey for ILTE that resulted in access to capital markets with a combination of domestic and international investors.
• A&M worked closely with the company’s teams, ensuring adherence to legal and regulatory requirements as well as best practice in the market.

Quotes from the Client

• ILTE’s CEO, Dainius Vilčinskas, highlighted that these bonds mark the beginning of an entirely new stage in the market. By using a securitisation structure and issuing bonds with the highest credit rating, ILTE can now reach not only European but also major global institutional investors.
• “This issuance sends a clear signal to foreign investors that Lithuania’s capital market is open and reliable for long-term investment, and for us it marks a new stage of development. We succeeded in attracting strong international investors and implementing a securitisation structure that has not previously been used in the Baltic States. The funds raised will significantly expand financing for apartment building renovation and ensure that modernisation projects move forward faster and more efficiently. This structure will also serve as the basis for future issuances, which could grow to as much as EUR 800 million. ILTE will continue to develop innovative financing solutions that increase energy efficiency and support the implementation of other national strategic goals,” said Vilčinskas.
   
• Lithuania’s Minister of Finance Kristupas Vaitiekūnas emphasised that this achievement represents a major step in the development of Lithuania’s capital markets and an effective way to secure funding sources.
• “The AAA-rated issuance is not only a major achievement for Lithuania, but also a historic event for all Baltic capital markets. The Ministry of Finance, as the main shareholder, will continue to consistently strengthen ILTE with the goal of establishing it as the national development bank. We foresee a particularly important role for this institution: ILTE will need not only to significantly increase the scale of investments in Lithuania, but also to mobilise funds from international organisations and local investors. In this way, capital will flow directly into the Lithuanian economy, generating additional growth momentum. Our vision is that ILTE, operating according to the highest standards, will become one of the key financial institutions contributing to the country’s economic development and improving access to financing for both the private and public sectors,” the minister said.

Quotes from A&M

• "The issuance of the first securitisation in Lithuania, which also achieved AAA ratings, is a landmark achievement. It is an important milestone in the continued expansion of CEE securitisation as well as development bank and government-supported transactions in general, which are likely to be increasingly important in joining private and public capital going forward." Robert Bradbury, Head of Structured Credit
• "We are very pleased to have been able to assist ILTE with this landmark transaction, raising financing to expand its multi-apartment building renovation loans programme and developing securitisation and capital markets in Lithuania." Marcos Chazan, Senior Director, Structured Credit