June 2011

Lead manager on Østjydsk Bank’s rights issue and offering of capital securities

Østjydsk Bank is a local bank in Eastern Jutland with headquarters in Mariager and offices in a number of larger cities in Eastern Jutland. The bank’s focus was mainly on corporate clients, which accounted for 60 % of total credits.

Østjydsk Bank was funded by significant amounts of supplementary capital, which fell due within a short timeframe as well as short and long term state funding. The bank wished to strengthen its capital base and reduce funding costs.

ATRIUM advised the bank to carry out a rights issue to existing shareholders in the ratio of one new share for three existing shares, whereby existing shareholders could maintain their influence with a relatively limited investment. To attract new investors or shareholders looking for a stable yield, a hybrid loan (capital securities) was offered.

The proceeds from the issue and offering of capital securities resulted in a strengthening of the solvency ratio with 1.5 % to 19.2 % and of the core capital ratio with 1.4 % to 13.9 %.

As lead manager, we planned the rights issue and handled all dialogue and co-ordination with the Danish FSA and NASDAQ OMX Copenhagen in relation to the preparation of the prospectus and related announcements and materials. Further, we composed a consortium of underwriters and assisted in distributing subscription rights to professional investors.