GRPO successfully placed US$80 million first ever green secured bonds on the local market with the support of Galt & Taggart and TBC Capital
JSC "Georgia Renewable Energy Operations" ("GRPO") - a 100% subsidiary of Georgia Capital PLC ("Group" or "GCAP"), one of the leading platforms for renewable energy assets throughout Georgia, with the help of JSC "Galt & Taggart" " and LLC "TBS Capital", successfully placed the first green secured bonds on the Georgian market. $80 million 5-year bonds, so-called with a bullet payment schedule were issued and placed on October 12, 2022. It is worth noting that the bonds represent the largest corporate transaction in the local market.
As a result of successful pricing and book-building for the bonds, the fixed coupon was set at 7.00%, the issue and placement price at 100% of the nominal value of the bonds. The total interest expressed for the purchase of bonds exceeded the bond issue volume by approximately 25%, and the stated excess for the fixed coupon amounted to approximately 10%.
The proceeds were fully used to refinance the existing loan from GCAP, which the company had obtained from the $250,000,000 7.75% Eurobond to repay the debt attributable to the renewable energy business. The mentioned Euro-bonds were issued on July 28, 2020 by the former 100% shareholder of GRPO, JSC "Georgia Global Utilities" ("GGU").
GRPO obtained a Second Party Opinion from Sustainalytics, a leading provider of environmental, social and governance (“ESG”) research and analysis, for its Green Bond Framework. JSC “Galt and Taggart” and LLC “TBC Capital” acted as placement agents for the transaction. BLC Law Office and Dentons acted as legal advisors of the anchor investors, and EY LLC acted as the financial auditor of the issuer. The issuance was supported by long-standing partners of the business - the Dutch Development Bank/ Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. (“FMO”), the Asian Development Bank (“ADB”), the International Finance Corporation (“IFC”), and the European Bank for Reconstruction and Development (“EBRD”). FMO, ADB, and IFC acted as anchor investors for the transaction.
The transaction marks several significant milestones and contributes to the development of the Georgian capital market through encompassing Group’s long-standing presence on international markets, unparalleled track record and broad investor base. The successful placement as well as active support from strong partners in the conditions of the pandemic and the Russia-Ukraine war indicates a high degree of confidence from investors and positive expectations towards "Georgian Renewable Energy Operations" and Georgian economy as a whole.
"I am extremely pleased to announce that GRPO has successfully issued US$80 million green secured notes, which are expected to be listed on the Georgian Stock Exchange. This is the first-ever green notes issuance and the largest corporate transaction on the Georgian capital market. The landmark transaction is expected to incentivize green and sustainable bond issuances in the country and set a benchmark for other developers to align with high ESG standards. We are extremely proud to be pioneers in this regard and to contribute towards the development of the Georgian renewable energy sector. I would like to express my gratitude to our strategic investors - FMO, IFC, EBRD and ADB, placement agents - Galt & Taggart and TBC Capital, and all other involved parties." – Nuka Mshvidobadze, Chief Financial Officer of GRPO.
„I am delighted that in its role of a placement and calculation agent, Galt & Taggart was actively engaged in successful completion of such a landmark transaction. Considering its unique characteristics in terms of transaction size, secured nature and green status, as well as favorable pricing in the times of volatile global and regional macroeconomic conditions, the Bonds could easily become a new benchmark for local and even regional debt transactions. I want to thank and congratulate the entire Galt & Taggart team for successfully completing yet another and one of the most interesting transactions. Over the years, Galt & Taggart has been maintaining the position of leading investment bank, actively collaborating with private and public market participants, as well as international financial institutions“ – Otar Sharikadze, Managing Director of Galt & Taggart
"First of all, we congratulate GRPO on the successfully closed transaction. We are glad that the placement of the largest and at the same time the first green local bond in Georgia took place with the participation of TBC Capital. It should be noted that 2 years ago, TBC Capital was the co-manager of the first green Eurobond issue on the Georgian market by GRPO's parent company - Georgia Global Utilities. The placement of the second green bond underlines the company's long-term interest in sustainable development. Through the first locally issued green bond and the largest bond placed in Georgia, TBC Capital contributes to the development of the local capital market of Georgia", - Mary Chachanidze, Managing Director