Hepsor offers 9.5% yield on three-year bonds

Listed real estate developer Hepsor launches bond offering for Baltic investors starting today. The three-year bond has a yield of 9.5% with quarterly payments to investors.

The nominal value of the bonds offered is €1000, and the annual interest rate is 9.5%, payable to investors four times a year – in February, May, August, and November.

The initial issue volume is €6 million, but in the event of oversubscription, the company can increase it to €8 million. 

Hepsor plans to use the capital raised to expand its development portfolio and refinance its existing group loan. “What sets our offering apart from all the other bonds issued this year is that we’re not using the funds for one specific project, but rather for the growth of our entire development portfolio,” explained Martti Krass, Chairman of the Management Board at Hepsor.

 “This offering is the first stage of our bond program, aimed at making Hepsor’s financing structure more flexible to allowing us to respond more quickly to development and investment opportunities arising in the market,” added Krass. According to him, the next few years will bring substantial growth in the energy-efficient residential and commercial real estate segment.

The subscription period runs from 12 November to 21 November 2025, and subscription orders can be submitted through all banks offering investment services. The value date of the bonds is 26 November 2025, and the maturity date is 26 November 2028.

Like many other instruments available in the real estate development sector, Hepsor offers senior unsecured bonds. The company has, however, set financial covenants: equity must account for at least 20% of assets and liquidity must be available at all times to make the next interest payment.

Subject to application, the securities will be admitted to trading on the Baltic Bond List of Nasdaq Tallinn Stock Exchange, which will enable investors to trade them on the secondary market. The bonds are expected to start trading on or around 27 November 2025. The issue is organised by LHV Pank.

Hepsor AS develops residential and commercial real estate. The group operates in Estonia, Latvia and Canada. In 14 years of operation, we have built 2,003 homes and nearly 44,787 m² of commercial premises. Hepsor is the first real estate developer in the Baltic States to implement a series of innovative engineering solutions that make its buildings more energy efficient and environmentally friendly. The company has a portfolio of 25 development projects with a total area of 178,200 m². In addition, the group is involved in five projects in Canada, where its main role is to draw up detailed land use plans and obtain broader building rights.