Luminor Markets

• Foreign exchange rates indicated here are standard rates. You can buy or sell any currency included in the list at these rates 24/7 in the internet bank or at our customer service centres during the opening hours, call +371 67 17 1880 in advance. 
• Standard foreign exchange rates are informative and may change at any time. Increased margins for standard rates are applied on workdays from 17:00 to 9:00 and on weekends or bank holidays.

• Current account with Luminor.
• No need to sign a separate agreement, a currency exchange request is submitted in the internet bank or at the customer service center.

Financial risk management involves identifying risks, analyzing them and selecting instruments which could help to reduce the negative impact of market risks on the financial health of the company. Luminor offers a wide range of instruments which could help to manage currency exchange rate, market interest rate, and commodity price risks.

Companies which operate with partners from non-euro countries (import or export) are subject to currency rate risk. To reduce currency rate risk, Luminor offers FX Forward or FX swap.

FX Forward example

• A company has signed a contract to export goods to a trading partner who is located in non-euro country where the currency is USD. 
• According to the contract the company agrees to receive a USD payment with a 3- month delay. 
• In order to protect itself against adverse movements in EUR/USD exchange rate and to ensure predictable cash flows and income, the company agrees as soon as the contract is signed to sell US dollars at a predetermined rate on a specific future date. 

FX Swap example

• A company operates with both EUR and USD currencies. 
• The company expects an incoming payment in USD in 1 month time. At the same time, another urgent USD payment needs to be effected before that. 
• In order to protect itself against negative effects of EUR/USD rate fluctuations, the company enters into a FX swap agreement with Luminor whereby it buys US dollars from Luminor now and sells them back after 1 month. 
• Both the payment dates and the exchange rates are agreed with Luminor and known in advance.

Luminor can help to manage a company’s interest rate risk with Interest Rate Swaps (IRS) or Interest Rate Options. The service is suitable for companies that have existing or potential long-term exposure to changes in interest rates due to loans, investments, etc.

Interest Rate Swap example

• A company has taken from Luminor a long-term loan with a floating interest rate based on 3-month Euribor. 
• In order to protect itself from a rise in Euribor, the company enters into an interest rate swap (IRS) transaction with Luminor where it agrees to pay fixed interest rate against 3-month floating Euribor. 
• Luminor signs separate loan and derivatives (IRS) agreements with the customer, which are independent transactions. However, we try to tailor IRS terms and conditions (amortization, payment dates, etc) as much as possible to be in line with the loan terms and conditions.
• Instead of IRS, the company may look for other hedge solutions - Interest rate Options: caps, floors and collars.

Luminor offers hedging solutions  – swaps for a wide range of commodities (energy, oil, metal, agriculture) to help customers manage price risks and stabilize costs.

This is suitable for companies whose costs and/or income depend to a great extent on fluctuations in the prices of commodities tradable on financial markets. Based on customers’ needs and the opportunities in financial markets, we find the most appropriate risk management instrument for the customer.

Commodity swap example

• A producer consumes natural gas and diesel in the production process bought from a supplier at floating market prices. 
• If the prices for gas and/or diesel rise, the company incurs additional costs, which may negatively impact the price of their manufactured products.
• In order to make cash flows predictable and the prices for manufactured goods competitive, the company enters into commodity swap deal with the bank and agrees to pay a fixed price for gas and/or diesel for a specific period (for example, a year) against a floating index. 
• In addition, sometimes it is possible to benefit from price backwardation when prices for future commodity contracts are lower compared to spot prices for physical goods in the market.

• In order to conclude a transaction, a company needs to have a current account with Luminor. 
• The company should have a Legal Entity Identifier (LEI code).
• An agreement for derivatives transactions should be signed.
• Derivatives limit and collateral conditions should be approved.

Contact us by email markets@luminor.lv

More about the financial instruments and related risks here.

Key information documents here.

We offer

• Bond origination.
• Equity origination.

Purpose 

• Bonds are one of the sources of borrowed capital for a company’s growth. Take advantage of the diversification of funding sources by issuing bonds. 
• As a company, you may consider issuing shares to finance further development and growth of the company.

Risks

• Borrowing in capital markets or having your shares listed requires financial discipline and transparency. Adherence to financial covenants and reporting standards is key to maintaining trust of market participants.

Main service conditions

• A service agreement should be signed.
• In order to conclude a transaction, you need a securities account with Luminor.

Contact us by email DCM@luminorgroup.com.

Luminor offers comprehensive access to both the primary and secondary bond markets, serving large companies and organisations.

We offer 

• Access to a diverse range of bonds in both primary and secondary markets.
• Competitive pricing and liquidity to meet your trading needs.

Purpose

• Bonds generate steady income through regular interest payments.
• Lower-risk securities help preserve capital and are a good alternative to deposits.
• Diversification of investment portfolios and reducing overall risk.

Risks

• Interest rate risk: bond prices may fall if interest rates rise.
• Credit risk: the issuer may default on interest or principal payments.
• Market risk: bond prices can be affected by market conditions and economic factors.
• Liquidity risk: some bonds may be difficult to sell quickly without a significant price concession.

Main service conditions

• A service agreement should be signed.
• The company should have a Legal Entity Identifier (LEI code). 
• A securities account should be opened with Luminor.

Contact us by email fixedincome@luminorgroup.com.