The FINANCIAL -- Tbilisi, Georgia. IFC, a member of the World Bank Group, has supported Bank of Georgia in its inaugural local currency Eurobond issuance by investing 108.34 million Georgian lari, equivalent to approximately $45 million, helping to attract much-needed international financing in local currency for Georgia’s private sector, to boost job creation and economic growth.
As the anchor investor, IFC announced its commitment to purchase up to 30 percent in the bank’s planned issuance early on, supporting the offering during the investor roadshow and helping to strengthen confidence in the upcoming transaction. Bank of Georgia’s bond issuance has attracted 500 million Georgian lari (approximately $207 million) from about 20 international investors.
The three-year bond is the first off-shore local currency bond issued by a corporate from Georgia, and also the first in the past decade from a former member of the Soviet Union, other than Russia. The issuance will allow the country’s leading bank to boost long-term local currency financing, which enables businesses to grow and avoid risks related to borrowing in foreign currency. The issuance will also support the country’s de-dollarization efforts, aimed at reducing its reliance on foreign currency, according to IFC.
“The success of this landmark transaction demonstrates the confidence of international investors in Georgia’s currency and economy, and will help connect them to Georgia’s private sector financing needs,” said Jan van Bilsen, IFC Regional Manager for the South Caucasus. “It will also allow the bank to provide much-needed local currency finance to more retail borrowers and small and medium businesses, to help them expand, create more jobs, and boost economic development.”
“IFC has been a long-time partner for us and I am grateful for the tremendous support it has provided in this landmark transaction. IFC's bid gave us great support in building investor confidence and creating early momentum in book build,” said Kaha Kiknavelidze, Bank of Georgia, CEO. “This landmark bond has as much a developmental as a funding purpose. Successful completion of the issuance has greatly expanded the investor base in lari and, I hope, will deepen local fixed income and currency markets.”
Georgia became an IFC member in 1995. Since then, IFC has committed around $1.64 billion in long-term financing, of which $774 million was mobilized from partners, in 59 projects in financial services, agribusiness, manufacturing, and infrastructure. In addition, IFC has supported more than $331 million in trade through its trade finance program, and implemented a number of advisory projects focused on developing the private sector in Georgia. In fiscal year 2016, IFC invested almost $19 billion in developing countries worldwide.