Eleving Group S.A. (OT8) Earnings Call Transcript & Summary

Dear participants. Welcome to Eleving Group's investor call dedicated to the current public bond tap offering. As always, we will start the call with company's presentation continued by a live Q&A session. We're looking forward to receiving your questions. [Operator Instructions] For your convenience, we are recording this session, and a replay will be available shortly after the call. That being said, I'm turning the call over to our host, Eleving Group CEO, Modestas Sudnius; and CFO, Maris Kreics.

Thank you very much for the introduction, and thank you [ NASDAQ ] for hosting this event. And of course, thanks, everyone, for joining today's call. Thanks for showing the interest in ongoing the Eleving Group's bond offering. So today, obviously, we will tell a little bit more about our offering, what you can expect. What will be the yield, what are the maturities and all the technical aspects. But we're going to start with telling a little bit more about our business model, like will present recent results. We'll also tell like what we expect from the company in the near future. So I suggest to dive into the presentation right away. Let's start with company's overview. So very shortly who we are. So Eleving Group is a global financial technology company. We have 2 main product groups. So 2/3 of our business is in secured financing, it is in used vehicle financing where we're financing with most mainstream car on the street or motorcycles in some markets. And 1/3 of our business is in unsecured financing where we are primarily issuing loans for purposeful purchases, which are typically consumer electronics goods. And our story has started in Baltics already 13 years ago and up to this day, even though from a business side, the Baltics does not play such a significant role, but from business development side, it's very important hub where all our headquarters are located. We have close to 300 employees. And this is where we started developing our IT systems, our know-how and our business model is based that we control from Baltics quite hands on all of our 60 markets globally. Such model allows us to grow and grow quickly and focus on developing markets because this is part our strategy to go into developing markets where there is a bigger need for products like ours, where we're really making a difference. At the same time competition is smaller and we're able -- using our know-how and using our IT system we are able to deliver financial products in those markets, but not only that. Through our structure we're able to deliver not only a financial product, but also be the first-in-class when it comes to customer service, when it comes to underwriting customers and such business model worked great for us and then we're able to demonstrate solid results year-after-year. And if we move forward, here are the latest figures for Eleving Group. So already mentioned, like we are operating in 60 markets. Just a few days ago, we have celebrated the EUR 2 billion issued loans milestone, which is very symbolic, but at the same time very significant for our company. And that could not be achieved without quite significant growth over the last 8 years, on average, we're growing at 25% per year. And last year, we finished having EUR 372 million net loan portfolio, which is, of course, the engine for revenue generation, which was EUR 217 million for 2024. It brought EUR 90 million of EBITDA and resulted in EUR 30 million of total net profit. So all of these figures are best in company's history, and they were gradually growing year after year. Together with our financials, we're also investing in putting additional emphasis into our governance. Almost from day 1, we're domiciled in Luxembourg. So headquartered in Baltics but domiciled in Luxembourg that allows us to be quite successful in the debt capital markets outside Baltics, as Luxembourg is more understandable jurisdiction. At the same time as of last year, we've also reached another very significant milestone for the company. We became a public company, we've done an IPO. So now we're a listed company in Riga NASDAQ as well as in Frankfurt, in both main lists. And of course, operating many years in debt and now equity capital markets. We've been investing in our corporate governance, received multiple awards from NASDAQ. And also worth mentioning that already more than 6 years we were supervised and rated by Fitch Ratings. If we move forward -- so in this slide, you can see some of the key milestones of Eleving Group. And since we are raising the bonds again, so here we put a little bit additional emphasis on our history in bond raising. So as a company, you can see that our business has started in 2012 and portfolio grew to EUR 372 million at the end of last year. So it's clear that for us, as a company, part of the business is not only issue loans, but also raise financing and the bonds have been one of the main tools, how we have accomplished that. We issued our first bond in 2014 in Latvia, where at that time it was very unusual, I would say, transaction and bond market was not that developed. So -- but gradually we're coming back and we're also doing Eurobonds. So up to this date, we have raised, refinanced, repaid close to EUR 400 million of bonds and then currently we have EUR 200 million bonds outstanding in 2 different tranches, EUR 150 million tranche and EUR 50 million tranche. And as already mentioned, as of last year, we're already a listed company with close to EUR 200 million valuation and we have raised EUR 29 million, which, of course, strengthened us as a company. So now let's turn into -- dig deeper into business. Let's cover our products. So in this slide, I guess, the key takeaway is that our portfolio when it comes to product is also quite well-diversified. We started -- you can see like Mogo brand. So we started with Mogo brand, which is financing used vehicle, kind of mainstream car on the street. And this is a product which has already 13 -- we have 13 years in the market with that and it's close to half of our portfolio. We also have Primero brand, which is which is more luxurious, newer car financing on consumer finance side, depending on jurisdiction we're offering either consumer loans to buy consumer electronic goods or similar purchases or in some of our African markets, we're actually financing government employees and the employer is making the monthly payment. So it's quite good product in its nature. Also on our secured financing part, we have quite a few products which have a lot of features of services. So main one would be Mogo Boda Loans where we're financing the taxi, motorcycles in African markets and taxi there is typically actually a motorcycle, not a car. And while providing this product, we not only finance the motorcycle, but at the same time, we give a workplace to an employee because we allow to use our taxi association networks. We provide all the needed gear to work as a taxi driver, taxi or cargo driver and then finance things as [indiscernible] helmet and things like that. Also, we have in some of the Baltic markets, rent to buy product which is feeling -- similar financing that provides ultimate flexibility for the customer. And also we made an investment in car sharing business in a sustainable company in Car Guru. So combination of that, this is where our EUR 372 million portfolio sums up to. So quite diversified. And when we talk about diversification, we're very well diversified, not only in our products, but also in our geographies. So 53% of our overall net loan portfolio is in Continental Europe, 1/3 is in Africa and then 13% is in [ Caucasus ] and Uzbekistan. Quite a few markets. Most of them are developing. And of course, we acknowledge that in developing markets [ governance ] and maybe sometimes political situation might be a bit less stable to say European markets. That's why we really believe in this diversification. Our sweet spot for one market is to tap 5% to 10% of overall net loan portfolio. And so far, we've been very successful. Most of the markets fit in that category, and we don't have a market on which we would be too dependent like more than 15%. So such strategy works for us very well. We also want to keep it going forward as it allows to balance overall group's risk profile. And even in turbulent years such as COVID or such as beginning of the war or changing the interest rate environment, it allows us as a group to have very balanced operations overall and be profitable actually as a company as a group. We've been profitable in the last 8 years. If we move forward and deep dive a little bit more into our business processes, how do we do business. So let's start with issuances. And here again, we'll mention the word diversification. So diversified portfolio has been also issued through various sales channels, which we've established over time. Online still plays the most important role for us as a sales channel. Of course, product web pages. We have our car portals, which are not competing with the main ones, but which adds good source of leads to our business and also different integrations, different online integrations with our partners. So more than 60% of all the leads comes through online, but offline nonetheless, still plays quite an important role in our business. First of all, we have 282 branches across all of our 60 markets. So don't get scared. It's not very operational hedge, because often a branch can be just a table in a shopping mall where consumer electronic goods are sold and so on. In Estonia we have only one market -- only one branch, while in Albania, which is still like a bit more offline market, we have close to 40 branches. So we really -- we are adjusting our business model to particular market needs. And also very important to mention is our dealer partnerships, which we have close to 2,000. So dealer. This is someone who's selling the used cars from maybe that company may have 10 cars, maybe 1,000 cars, but they have all of our IT solutions and they are great ambassadors of our business and they can send us leads and then get that answer about the customer within a few minutes. So that's a really close collaboration, which allows us to cover full geography of each country without having physical presence ourselves in every single country and in every single city. And when it comes to E-Systems, what's important is that most of the systems are in-house developed and [indiscernible]. So that together with our regional structure because we have 3 very strong and quite independent regions, which don't compete for the same resources and which can develop businesses in parallel allows us not only to launch markets and to kind of grow our business quickly, but at the same time to always have a very hands-on control of what's happening in each and every single market. A few more words about our technology, and I want to start with those figures on the right corner. So just to understand the scale of the operations. So if we look at 2024, during the whole year, we received a little bit more than 1.8 million of applications. And these were already full applications, not leads with all the information needed to score the customer. And after all the scoring has been done, our conversion rates were, I would say, quite conservative. It was 8.3% on vehicle finance side and 33% on consumer finance. So first of all, the difference comes because vehicle finance is primarily car financing. So tickets are bigger, entry tickets are bigger. Of course, we need to score the car as well and with less returning customers because length of the loans are longer and people are not changing car that frequently. And the whole process works like that in initial stage, we're trying to collect as much information about the customer and vehicle as possible. So we're regulated entity in almost all of our markets. So we have access to all the main official databases like credit bureaus, good, bad credit bureau, income databases also in the markets where -- in non-EU markets, we have access to a wider range of data sources such as mobile wallets in African markets or mobile phone operator data. And all of that provides us a lot of data points to score our customers. Same with car. But once we get VIN Code, we're able to get all the history of what happened with the car and mix with data which we get from car portals, we're able to provide quite accurate valuation. And all of that is fed into our systems, into our underwriting models. Some of them are run in Microsoft Azure. So we're able to utilize machine learning and different AI tools. But what's most important is that we're not only able to provide answer within minutes or sometimes even seconds, which is a big competitive advantage. And at the same time, it's about human interaction. So we decrease our employees mistakes to minimum. And in most of the markets, we are one or one of the few players who are able to offer this whole package. If we move forward, of course, debt collection is also a very important part of the business for business as ours. And here, again, we rely a lot on technology and in-house knowledge. Most of the systems are in-house developed and we use such things as robot calls, very advanced notification sending systems, GPS tracking for some customers who [indiscernible] and things like that. And also, we have in-house teams who does most of the processes. Typically after legal collection, we do everything in-house. And that allows us to have, I would say, real outstanding results. So a few numbers which I would like to call out. So first of all, the collection ratio is quite good, 66%. That means that even if person has financial difficulties in most of the cases, we're able to recover him or her in case. Of course, in those unfortunate cases where customer defaults and there is a like secured loan, then we go into repossession stage. And we also very quickly get 84% of all the historical -- all the vehicles which went into default. Once we do that, we try to sell them, we do it on average in 1.5 months. And all of that allows us to have post termination recovery ratio of 85%. What does it mean? That at the moment when customer stops paying from that moment, all the other actions allow us to recover 85% of outstanding principal at that moment, which is really good result. And then Maris, our CFO, will show that in our NPL ratios. So with that, I'm handing it over to you, Maris.

Thank you, Modestas. Let me continue with the financial highlights and here, you'll notice a very impressive growth over the last 4 years. Specifically, if we start with revenue, you'll see that we have managed to achieve for the last year, more than EUR 200 million in total revenue, specifically EUR 217 million, which was 15% higher figure than it was in year 2023. In addition to that, we are especially proud with our improvements in the profitability. And if we start off with EBITDA. So for EBITDA, we managed to achieve EUR 90 million for year 2024, which was 16% higher than in the previous year. And lastly, our net profit has improved even more so and we managed to achieve EUR 29.6 million for year 2024, which was more than 30% of the improvement compared to the year -- 1 year before. In the lower part of the slide, we have 3 financial covenants, which are present currently in both of our Eurobonds. And if we start off with the interest coverage ratio, you'll notice that we are 2.4x of interest expenses over EBITDA. This is actually almost 2x higher figure than the minimum as per Eurobond documentation, which was 1.25. If you look at the net leverage, here, we're also at the all-time lowest level and here, the lower the better from the bondholders' perspective. Means we have less leverage, more on capital in the business. So we are at 3.3x as of the end of December 2024, while the maximum allowed level is 6x. And then moving on to capitalization ratio, especially following successful IPO, we're at 29.3% of capitalization ratio as of the end of year 2024, which is 2x higher figure than the minimum level as per the Eurobond documentation. Moving on to our balance sheet. So here in the upper left corner of the slide, you can see our asset development over the time over the last 8 years. So you can see quite an impressive growth when we started in 2017 with slightly more than EUR 100 million in total assets, and now we're nearing EUR 0.5 billion of total assets. If you look at the liabilities and if you recall previous slides, so if you recall previous slides, which Modestas was presenting, they were more about diversified business, diversified across portfolio in -- specifically from a geographical perspective as well as product perspective, you can actually see the same or similar diversification in our liabilities approach. Still, the majority of our liabilities are into the Eurobonds. So specifically to our Eurobonds, EUR 150 million and EUR 50 million Eurobonds. Both of these bonds were issued at different times and EUR 150 million Eurobond is maturing next year in October, while the EUR 50 million Eurobond is maturing in October year 2028. Interestingly enough, both bonds, although issued with the different coupon rates, are currently yielding the same return for our bondholders, especially if you look at the secondary trading prices and both bonds are currently yielding approximately close to or slightly below 10% annually. Both bonds are also listed simultaneously in Riga Stock Exchange as well in Frankfurt. And they're also Fitch rated with B with a stable outlook. If we look at the other part of our liabilities. So in addition to our Eurobonds, the second largest source of financing for us remains to be Mintos marketplace for loans. This is the largest platform of its kind in the Continental Europe and as of the end of December last year, we stood at EUR 60.5 million in funds attracted through the platform. In addition to that, we have been also very successful in raising local capital from local lenders, especially in non-Euro markets. So such markets as Kenya or Botswana or Namibia in African markets. We have managed to place local notes, local debt instruments amongst local investors, banks, and by doing so, we're not only diversifying away from one single source of capital for us and not only improving our blended cost of borrowing, but we're also minimizing our exposure towards these non-Euro currencies in the markets where we operate. If we move on and if we now look at the portfolio quality, can start off by looking at the net loan portfolio for vehicle business. And here, the nonperforming loan portion in our net loan portfolio for vehicle business is 6.1% only. And this is also taking into account a quite conservative NPL definition, which is 35 days and more overdue loans. If you look at the consumer business segment, here, we have NPLs of less than 5%, mainly 4.3%. And here, we are using a more conventional NPL definition of 90-plus days overdue. On the right-hand side of the slide, you can see the gross before provisions and net post-provision NPLs over the last 3 years and how they have developed. The key story here is that our NPLs have been relatively stable across the board even if we look back for the -- throughout these last 3 years, which were especially challenging for any consumer globally, specifically taking into account any inflationary pressure. Now if we look at the outlook, at the business outlook for this year, for year 2025, it is safe to say that you can expect from our business, from our company to be launching new markets and especially in our vehicle business segment, we are looking to launch 1 to 2 new markets where we operate. And these markets will be a mix or should be a mix between Africa and possibly also European region. In addition to that, we aim to maintain our market-leading position in every single market where we operate. If we look at the consumer business segment. So here, we expect to grow loan portfolio substantially, especially by issuing higher ticket, lower APR products and substantially scaling our loan portfolios in the newly obtained African markets, especially in the Southern African region. If we think about the capital management. So following our promise to our new shareholders post-IPO, we are aiming to nearly double the business in the next 2 to 3 years while maintaining quite a substantially high dividend payout ratio of 15% annually. And of course, for this, we'll need fresh capital and EUR 29 million raised throughout IPO will not be enough since we need to add more than EUR 100 million to our net loan portfolio, that effectively means that we'll be very active participants in the European debt capital markets, and this kicks off with the new bond tap offer, which we'll discuss in the later slides. In addition to that, our investors can expect us proactively addressing our 2026 Eurobond -- EUR 150 million Eurobond maturity, and we expect a tangible refinancing plan in place already as soon as the first half of this year. And lastly, on the governance and sustainability. We are still developing and finishing our ESG strategy for next 5 years, while maintaining certain commitments that we have made to our communities in terms of carbon neutrality and emissions. Speaking on ESG. So you can look at our business from 3 angles, same as any other business. And if we start with environment first, so our mission is to finance the mainstream vehicle that drives on everyday streets of the markets where we operate in Europe that actually means 9- to 10-year-old vehicles. In our instance, we also try to promote as possible, as much as possible, a push towards more sustainable electric or hybrid mobility, and that's why we're offering better terms for customers, for those customers who choose electric or hybrid vehicles. In addition to that, we are scaling up our e-motorcycle financing in African business, for which we also have already funding locked in place from IFC. If you look at it from the social aspect, so here, we are also educating our potential existing and future customers by implementing or having online tools in place where our customers can proactively check their creditworthiness and actually can get acquainted with specific terms of the potential loan from our company. And lastly, on the governance front, especially following successful IPO. We now have an independent Supervisory Board in place, and we have a well-functioning governance framework, which is already yielding tangible results. And those tangible results would be awards for Best Investor Relations from NASDAQ Baltic in year 2023 and also just recently an additional award for a capital markets event of the year in the Baltics for last year. Now if you look in details on the proposed transaction, so here important to note is that under this transaction, we are tapping or issuing new bonds under the framework of EUR 50 million bond. So this is the existing documentation that is already in the place. The technical aspects of the bonds do not change. So the ISIN stays the same. The bond will continue to be listed in the Baltic Stock Exchange as well as in Frankfurt Stock Exchange. And this bond, we're offering to our investors with a 10% yield to maturity. So that's the 10% return that our investors can expect to receive provided they will hold the bond until the maturity. This 10% return is being ensured by having already existing in place 13% coupon rate. However, this bond, we are issuing with a price of 109%. It is important to note that this price is actually close to or even slightly below the secondary trading price of the bonds. So if you look at the secondary trading volumes and the prices in the NASDAQ Baltic or for that matter also in the Frankfurt Stock Exchange. You'll notice that our bond since the very first month of the issuance has been trading consistently above nominal and for the last year or even more so consistently above 110% from the nominal. We're looking to raise the new amount up to EUR 50 million. So that means -- in practice, that means that, that volume can be anything between EUR 0 million to EUR 50 million and what's important is that we are raising new capital, so new capital for our business, which will be invested into our high-yielding net loan portfolio, but our balance sheet management actually allows us in the near term to pay down the most expensive part of the debt. So that means in the case if we would raise EUR 50 million, those EUR 50 million would not sit idle on the balance sheet, and we would not just be having liquid assets in our bank accounts and paying high-interest rate or investors will actually would be in the near term, paying down the most expensive part of our debt, and we have the ability to partially prepay parts of our debt without any early prepayment penalties. So effectively, any euro raised would be effectively and efficiently put into use. What's important also, we're not let's say, affecting negatively our Eurobond maintenance covenants by issuing -- raising this new capital, new debt. So the only thing you'll notice here is that the capitalization in the near term might decline slightly. However, it will quickly rebound once we invest in our net loan portfolio and we start earning money from our net loan portfolio. And lastly, it is important to highlight the fact that this is one of -- actually, one of the few senior secured and guaranteed bonds in the Baltic market in general. So this is not customary that the companies would actually offer secured and guaranteed bonds. This bond is specifically guaranteed by more than 10 subsidiaries where we operate. You can see those here in the slide with the dotted line. In addition to that, we will be providing loan portfolio, main bank account and share pledges of 2 of our markets in Caucasus region, so Armenia and Georgia. In this slide, so this one is actually an excerpt from bond documentation, so terms and conditions. Here, you can see the specific details, the names of the legal companies that are acting as guarantors, the companies that are providing share pledges and actual pledge mechanism. As mentioned before, this bond, same as the company, same as the other bonds will remain to be rated by Fitch rating agency with a B and stable outlook. Importantly, the remaining maturity for this bond is 3.5 years. So although we issued a 5-year bond back in October 2023, now in March 2025, we have 3.5 years left towards the maturity. The bond is issued under the Luxembourg Law with a standard high-yield documentation and regulatory framework, which will be [indiscernible], which is customary in the European high-yield markets. And lastly, we have several Baltic banks acting -- Baltic and German banks acting as managers for these bond issuance. I strongly suggest our investors to visit our web page. Our company's web page as well as our dedicated bond web page where you can actually get acquainted with the specific details how you can subscribe through your main banks where you kind of bank yourself. And if there -- you are not finding a bank who is able to provide the subscription services, I suggest to look for, let's say, alternatives and one of the -- and most convenient alternatives is also Mintos platform, which is offering subscription to our bonds, even starting with the EUR 50 starting ticket. I think, with this slide, I'll hand it over back to you, Modestas.

Thank you, Maris. So this is the last slide of today's presentation and summary, you can say the key highlights why to consider investing in our bond. So first of all, you've been hearing today a lot the word diversification and our business is really well diversified, it's across 60 markets. We're in developing markets, growing economies, at the same time, we do acknowledge that they possess certain risks. So portfolio is very well diversified between the markets. At the same time, also very well-diversified between our products, having 2/3 in secured and 1/3 in non-secured lending. And we've been showing consistently that we know how to manage portfolio quality very well even in tough times, such as COVID, like we managed to maintain strong and I would say low NPL ratios across our product range which are constantly improving. When it comes to infrastructure, we've been operating and investing in our infrastructure already for 13 years. So we have very well diversified sales channels, both online and off-line. We have very well functioning E systems, which allows us to scale our business, which allows us to have very strong daily oversight of our businesses. And most importantly, we have team of close to 3,000 employees across all of our 60 markets and our headquarters team with a solid track record, with a proven track record which knows how to run those markets very effectively. And of course, since we're offering to invest into debt instrument, the credit profile is especially important here. First of all, I think, everyone should look what the company has achieved in the previous issuances and in the previous reporting periods and where we stand now as a company basically across the board, we have highest ever financial figures. Our equity is all-time highest post IPO, our capitalization ratio is close to 30%. We just -- we came out after another very successful year, which has been historically the most successful and most profitable where we have earned EUR 30 million of net profit. As already mentioned, we're a listed company to prime exchanges. We've proven -- we know how to issue bonds, we know how to finance bonds. We know how to repay bonds and we have already more than 10 years of track record in capital debt markets. And lastly, on top of that we have an oversight from third party from future obligations. So thank you very much. That's it. When it comes to slide presentation. So I know that there were questions, I'm handing back to Yolanda.

[Operator Instructions] The first question that we've received. What's the reason or for what are you raising the money and why not green bonds?

As mentioned already before, the primary reason is the growth of our net loan portfolio, and this is the primary user proceeds. In the near term, will put the money raised into efficient use of capital and will pay down the most expensive part of the debt, but ultimately, we expect to see all the money raised being invested in the net loan portfolio. On the green bond question, here, of course, we have assessed the opportunities to issue green or sustainable -- sustainability linked bonds. However, we believe as of the current state of the company, especially given the fact that our green or sustainability, mobility products are just starting to take off, and we don't yet have a sizable let's say, electric or hybrid vehicle loan portfolios that we would kind of raise the bond against. We believe that it is still premature for our company to be issuing or thinking about green or sustainability-linked bonds. However, we do not exclude that opportunity sometime in the future.

Do you consider there is appropriate governance in the group from underwriting to treasury management and Board capability?

So first of all, it is worth mentioning that we have invested quite a bit in our corporate governance over last year preparing for a [ IPO ] process. So as of now, management Board is being governed by primarily Independent Supervisory Board. We also have nonexecutive directors in Luxembourg level and going below the corporate structure there are lot of different corporate governance levels across key functions from already mentioned underwriting to say treasury. And then lastly, since we're regulated by mainly central banks across our markets. We also put additional emphasis on corporate governance. Even on country level, often we have Independent Supervisory Boards and similar structures. So as of now, we believe that we have an appropriate corporate governance structure, which allows not only to manage business transparently, effectively, but at the same time, to still be able to make timely and quick decisions.

What will be the repurchase price for the new bond issue, which is being sold at EUR 9 above nominal?

I guess the question here is more specifically about call options embedded in the bond documentation. So the first call option is in October year 2026 at a price of 101% from nominal, which would be then followed by the second call option in October in year 2027, which from that point onwards would be potentially done at par. But here, I also wanted to mention the fact that every time our bond nears the maturity or we are exercising any more call options. We are always providing a new debt instrument to our existing and future potential investors to invest in because as a company, and here also, I can go back to our promise to our new shareholders through IPO process. We expect to substantially or significantly grow the company. So that means our net loan portfolio should be exceeding EUR 500 million in the next 2 to 3 years. So that means we'll be actually always looking for the new capital to be raised. So repeating myself, whenever we would exercise the call option or call the bond prematurely. Our investors can be sure to expect a new bond offer to replace the previous one.

Which markets where you operate in consider -- are considered to be the riskiest and why?

So first of all, I think, when we look at every market, there's many different risks which we need to evaluate from product risk, customer risk, market risk, economic situation, even foreign exchange risk, but the same time also such risk as competition risk. So you can't just carve out only market risk. And if we still think that kind of core risk to address are kind of product risk or like the customer risk and country risk, then here, we try to balance those risks together. And if country possesses higher inherent risk due to development stage of the market, due to some political situation, then of course, the conditions for the customer to get the financing that they are, let's say, also more conservative, most likely pricing would be higher. Entry barriers also would be higher. I could give like a good example and compare probably least riskiest market Estonia to markets -- to some African market that we're issuing the same car financing products. So in Estonia, down payment can be even 0, while average down payment in market as Uganda is 40%. So skin in the game of a customer differs significantly. On top of that, of course, pricing is also way higher in market as Uganda. So we always -- if market has a higher market risk and economic risk, then we balance that with more conservative underwriting policies and product features and that proved to be a right strategy. And I guess the best test was COVID times when even though there has been different restrictions and different, let's say, turbulences in different markets especially developing markets and such strategy while managing market risk with product risk allow us to still have successful years. So I wouldn't call some particular market, but we always take different market risk into account and we balance it with other risks.

As I don't see any raised hands, let's continue with the questions submitted in writing. How much will be the net debt EBITDA ratio after the transaction?

I think we can go back to our slides here. So that would be seen here post transaction in the lower left hand -- lower left part of the slide. So that would be 3.5x. So the increase would be, I would call insignificant.

On the same topic, will all of the proceeds be used for refinancing?

Not all of the proceeds would be used for financing. So here, we have assumed that roughly half of the proceeds would be used for refinancing existing liabilities, other would be put into the net loan portfolio in the short term. Again, ultimately, at the end of the day, all the proceeds over the longer period of time would be invested in the net loan portfolio.

Is there any plan to increase the credit rating for the company and also for future issues, paying 10% is at least 3x more than what's the average yield in the market for corporate investment-grade bonds?

Okay. Thank you. So I guess the last observation we take that as a compliment, and we take it as a fact that we are offering a very nice attractive risk-reward ratio for our investors, even being rated B with a stable outlook. Of course, we as a company and now especially post IPO, we will be having a discussion with our rating agency. That discussion is expected to have -- happen in the next few months. Actually, by end of June, we should have our annual rating reassessment cycle finished. So of course, we'll be having in-depth discussions with the rating agency. And I'm sure we're going to be going through our improved credit profile, and we'll look at all the details and all the post IPO positive effects to our credit story and the balance sheet. No promises as of this moment from our side as a company, we'll be doing everything for the credit to be improved in the future.

Our next question, what is the bid yield to maturity in the OTC market? For example, on Bloomberg. Do any banks provide quotes or liquidity for this issuance?

Yes. So I believe the bid yield -- bid ask yield-to-maturity, I wouldn't be able to quote from top of my head. But as I mentioned before, the yield to maturity. If you look at the Bloomberg screen probably is at or below 10%. So our goal with issuing this stat was to price the bond appropriately as it is trading in the secondary market or even priced slightly below. We don't have a dedicated let's say, liquidity manager in place. However, if you saw the terms of our bond, you saw quite a substantial number of different banks participating. So you can be sure to expect that these banks will sufficiently service their customers and also from time to time, participate in OTC markets. And we have seen them being very active in the currently issued bonds.

What are your current highest interest liabilities?

So current from -- purely from the nominal interest rate perspective, I believe the highest cost for our debt, you would find in our African, let's say, markets where we are borrowing in local currency. However, from our perspective, there, we need to deduct any potential local currency depreciation. So that's why, as I mentioned before, also we're more than happy to borrow at a higher nominal interest rate, especially in non-Euro markets because by doing so, we're actually fixing in or minimizing the potential currency exchange rate volatility for our P&L, especially if we look at those markets. If you look at the Euro markets, then the highest cost of debt, I believe we'll be able to find in the Mintos platform. Although the platform -- in the platform currently, we pay somewhere in the range to 10%, 10.5% blended. That consists from different loan offerings starting as low as 6%, 7% and going as high as 12% or even maybe 13%. And these 12% to 13% loans in the platform, these are the ones that we'll be looking to refinance in the near term, short term, partially with the bond tap proceeds.

Our next question is about the possible payment usage of repayment rights. Under what conditions would you exercise early repayment right after 31st of October 2026? As bond offer is at premium, earlier repayments would impact the real yield for bondholders.

Yes, sure. And that's correct observation provided that we would exercise that call option. The real yield would go down, but I think it's important to highlight that it would not go down in time. So let's say, currently, we're offering a yield to maturity of 10%, yield to call or yield to first call, I believe, is somewhat in the range of around 8%. So it's a still very high single-digit yield figure, even if we would exercise the call option. However, if we speak theoretically under the conditions where we would exercise the call option, these would be the usual conditions. So us proactively thinking and, let's say, using the favorable windows in the capital markets for potential bond refinance. So let's say, if we would see that some 2 years or 1.5 years until the bond matures there are favorable conditions in the markets, meaning we could expect substantial demand for our new bond to be issued in the markets. Then we would exercise the call option in those instances but then again, it would be replaced with the new debt offering. And in most instances, we have always offered our existing bondholders to participate in the new bond offerings.

Who are your biggest competitors in the Baltics?

When we talk about Baltics, here by now biggest competitors are banks, not traditional [ Scandinavian ] banks, but banks which are a bit more flexible, a bit faster, a bit more consumer oriented. So at different segments, they are the biggest competitors for us. We have our own benefits. We in most cases have better sales channels, more widespread ones. But for banks -- and faster processes, but the banks can offer lower price since they have deposit money.

We have 2 more questions to go. Who are the largest holders of your bonds?

So this information is unfortunately not fully available for us because these are -- both of these bonds are having, let's say, foreign or non-Baltic ISIN. So this bond is DE ISIN. The other EUR 150 million Eurobond is XS ISIN. So we do not see the current ownership of these bonds because the bonds after the subscription, they could have and most likely have changed hands. However, I can say that we are really proud about a really diverse structure or participants in our bonds. If we compare, let's say, EUR 150 million to this EUR 50 million bond, which we are tapping currently, I would say that this EUR 50 million bond is more Baltic retail/private investor-driven then the EUR 150 million bond, which in turn is actually more invested by larger institutional asset managers, private banks, in some instance, pension funds as well. So that would be, you can call it indirectly a more institutional as bond. At the same time, that bond is also actively trading in the secondary market. And we see that, that bond is invested also quite substantially from the retail, especially coming out of Germany.

At this moment, the last question from the participants, are the average interest rates of your products disclosed anywhere?

We do not -- let's say we have disclosed in the bond documentation and the prospectus -- we have certain from 2 levels per product per market. So I believe in our bond prospectus, you should be able to find that information. As it relates to the presentation of financial instruments, we disclosed the blended, the return on our loan portfolio. But specific market per market, product per product, you should be able to find those details in the bond prospectus.

We have addressed all questions. Before we're closing the call, Modestas, Maris, over to you for the final remarks.

Thank you very much. So once again, I wanted to thank everyone for showing interest in the company, in our bond offering. And as Maris has already mentioned, our web page, eleving.com is the best source for additional information where you can find all of our financial results, where you can find more detailed explanations how to invest, you can even find the yield calculator and many useful information. So if you're interested in this offering, I suggest you can check out our web page. And lastly, a reminder that the subscription period ends this Friday, the 7th of March. Typically, banks are already closing investment opportunities. Some of the banks are closing even midday. So be mindful of that. Thank you for that. I guess that's it. Thanks, everyone. Thank you, [ NASDAQ ], for arranging this, and have a nice day, everyone.