The City of Tartu decided at its sitting Thursday to issue 9.8 million euros worth of ten-year bonds.
Danske was picked from among five banks to be the underwriter.
The coupon will be the six-month Euribor offered rate plus a margin of 1.02 percent.
The city will use the loan to refinance debt obligations planned for this year and will not be taking on additional loans.
The city's last bond issue took place about a year ago and totalled 7.8 million euros.