June 17, 2016, Tbilisi –the multilateral development bank (“MDB”) EBRD issued the first public listed deal by an international issuer in the Georgian domestic bond market. The five year Georgian Lari (“GEL”) floating rate bond for GEL 107 million has a coupon linked to the 3-month CD rate issued by the National Bank of Georgia (“NBG”), with the initial 3-month coupon set at 6.45% following the NBG’s auction on Wednesday. This was the EBRD’s third successful bond issuance in GEL to be lead managed by JSC Galt & Taggart. Following an auction process, application was made for the bond to be listed on the Georgian Stock Exchange.
Since its inaugural private placement in the Georgian market in March 2014, which was the first ever Georgian Lari bond by an international financial institution, EBRD has been working with the regulators, and in particular with the National Bank of Georgia, to clarify legislation and introduce regulatory changes to take account of its supranational structure and to recognise the specificities of MDBs, thereby ensuring that it could fulfill all the requirements for public offerings in the domestic market, including listing the bonds on the Georgian Stock Exchange.
The EBRD has sought, over many years, to tackle the problems of excessive reliance on foreign capital and foreign exchange borrowing in emerging economies, by encouraging borrowing in the local currency as well as developing or strengthening local capital markets. This offering, therefore, not only represents another step forward in the development of the local capital market but is also important in furthering the EBRD’s local currency lending programme in Georgia, which was started in December 2009. The proceeds of all three of EBRD’s Georgian Lari bonds in the Georgian domestic market are directed to key domestic projects. EBRD has extended 16 Georgian Lari-denominated projects for a total of approximately GEL 380 million, which include loans for small businesses, energy efficiency and women in business.
“We are delighted with the progress we have made during the last few years in Georgia in contributing to the development towards more efficient and deeper local currency capital markets. This successful bond issue is a testimony of this success and strengthens our commitment towards working for further development” affirmed András Simor, Vice President and CFO of the EBRD.
“I am pleased to note Galt & Taggart’s role in this landmark transaction. This is not only the first public listed issuance by an international issuer in the domestic market, but also the issuance with the longest maturity (5 years) to date. Galt & Taggart has become the go-to provider of placement and underwriting services for IFIs and companies alike, as evidenced by our partnership with EBRD on each of its three issuances in Georgia,” commented Archil Gachechiladze, Chairman of Galt & Taggart, Deputy CEO of Bank of Georgia.
For inquiries please contact Galt & Taggart via email at st@gt.ge.
