ePRIMUS, the new digital platform developed by the team behind eVOTE, revolutionizes public bond issuances

Governance Partners and Art Games, the team that also created the eVOTE and eVotePRO applications, the first digital participation and voting solutions at the GSM for retail and institutional investors, present a new digital application for the capital market;

Alba Iulia City Hall uses the solution for a financing of 30 mln. euro

● ePRIMUS is a digital platform dedicated to municipal bond offers and placements, which aims to increase transparency on how the demand and cost of financing are formed. The new platform brings real-time subscription data to the screens of all those interested;

● Alba Iulia City Hall uses the solution for a financing of 30 million euros. The platform helps public authorities to obtain lower interest rates and save money for the community, eliminating the arbitrary setting of the cost of financing.

Public authorities that borrow from the capital market have a new digital tool at their disposal: ePRIMUS, a platform designed to bring total transparency in municipal bond offerings and placements. The platform is developed by Governance Partners, led by Mihai Chișu, former broker and CEO and co-founder of eVOTE, together with Art Games, led by Ionuț Albu, a technology company that also created the eVOTE and eVotePRO solutions.

The bond issue of the Alba Iulia City Hall ends on September 25 and is intermediated by BRD Groupe Société Générale and Raiffeisen Bank, and VMB Partners has the role of financial advisor. The offer targets a maximum of 300,000 municipal bonds, with a total value of up to 30 million euros and a maturity of 10 years.

The coupon is variable, calculated as the 6-month EURIBOR (the reference rate at which banks in the euro area lend to each other) plus a margin between 2.5% and 2.9%. The listing of bonds on the BVB is scheduled for October 15, under the symbol ALB36E.

Everything that happens in the offer, in sight

One of the important elements brought by ePRIMUS is visibility to the entire market. Traditionally, in a public offering, information about retail investors could be publicly visible, while institutional investors’ orders remained accessible to the consortium managing the offer.

ePRIMUS centralizes, on the page dedicated to each offer, the purchase orders coming from both institutional and retail investors, thus providing a complete picture of the existing demand in the market.

Price, quantity and allocation information can be tracked on the platform, including the strike price, the quantity allocated to each order and the quantity obtained at that price in the case of a pro rata allocation. Information is also available to help investors track price and quantity levels and optimize their orders.

Depending on the conditions of each offer, the data is updated in real time or at the end of the day. The information can be consulted publicly, without the need for an account opened with a broker.

An interest rate set by the market, not assumed

One of the main stakes of ePRIMUS is the optimization of the cost of financing for the issuer.

In a classic bond issue, the issuer sets a ceiling for the interest rate and hopes that the market will respond well. Not infrequently we hear that the state or a municipality borrowed at 7%, and the demand was five times higher than the amount requested. Although it seems like a success, such oversubscription actually shows that the interest offered was too high. If the same amount could have been attracted at 6.5% or 6%, the difference would have translated, throughout the duration of the loan, into lower rates and savings of millions of euros for the public budget.

ePRIMUS changes this logic. Investors place orders at different interest levels, and those who ask for a lower interest rate receive full allocation. The final margin is no longer an assumption, but the direct result of the actual auction: investors ask for a lower interest rate to receive full allocation, which lowers the cost of financing and generates savings of millions of euros in the long term for public authorities.

“Through ePRIMUS we make visible a process that until now was difficult to follow from the outside. A large oversubscription may sound very good, but for an issuer the important question is whether it attracted the amount it needed at the most efficient cost offered by the market. ePRIMUS shows both the demand of institutional investors and that of retail investors and allows tracking the interest levels at which this demand is formed. Finally, we are talking about more transparency for investors and the possibility for a public authority to optimize its financing cost, which, in the long run, can mean important savings for the community”, says Mihai Chișu, founder of ePRIMUS.

About ePRIMUS

ePRIMUS is a digital platform dedicated to the transparency of municipal bond offers and placements. The solution centralizes and publicly displays information on the evolution of subscriptions, investor orders, price and quantity levels and the allocation process, with real-time or end-of-day updates, depending on the conditions of each offer. More details can be found on www.eprimus.ro

Despre Governance Partners

It is a company founded in 2018 by associating specialists in the field of capital markets and IT. Among the products developed by Governance Partners are eVOTE – the first application for participation and digital voting in the General Shareholders’ Meeting for listed companies, as well as the extension for institutional investors, eVote PRO.