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ELLA Bank sells Ft 2.2 bln of mortgage-backed bonds at auction

Hungarian home savings bank ELLA Zrt sold mortgage-backed bonds worth Ft 2.2 billion at an auction on Monday after receiving offers worth Ft 2.2 billion, ELLA announced on the website of the Budapest Stock Exchange (BÉT).

The three-year floating-rate bonds will expire on November 21, 2009. The bonds pay interest quarterly, and the interest is the three-month Bubor plus 1%. The interest on the first interest period is annual 9.2%. The current one is the second issue under ELLA Bank's Ft 12 billion mortgage bond program launched a year ago. The first issue, of Ft 1.1 billion three-year floating-rate bonds, took place last December.
Shareholders of ELLA Bank decided at a general meeting on October 26 to raise the bank's registered capital to Ft 4 billion. The owners also decided to issue a €7 million subordinated loan to ELLA, to be disbursed in several installments. Excluding the current one, ELLA Bank received subordinated loans to a combined €3.5 million from its majority-owner, Luxembourg-based Mortgage Holding, earlier this year. As a result of the capital raise, Mortgage Holding's share of ELLA will gain another 5% of the bank, bringing its stake to 95%.