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PASHA Bank Insures GEL 20 Million Bond Issuance

PASHA Bank Georgia has insured bond issuance by FINCA Bank Georgia worth a record GEL 20 million. This is the first precedent of such a big volume of bond being issued without the cooperation of a large international financial institution in Georgia. Denomination of bond in the national currency is another big advantage of the deal. With its big experience of bond market development in Azerbaijan, PASHA Bank promises to continue developing the bond market in Georgia.

As part of the deal FINCA Bank Georgia will issue 200 bonds worth GEL 100,000 for three year terms. Annual interest rate per bond is 10.1%, which will be paid semi-annually.

"PASHA Bank is a financial institution with significant experience in issuing bonds in Azerbaijan. We are actively working on the development of this direction in Georgia," said Shahin Mammadov, Director General at PASHA Bank Georgia.

According to Mammadov, this is the first deal regarding bond issuance in Georgia. "We are in active negotiation with other interested parties. We believe that the Georgian security market has significant potential. With our experience we will try to develop this market," Mammadov said.

The deal has very important distinguishing characteristics such as: they are issued in GEL; the deal participants are two non-IFI (International Financial Institution) companies; and, the volume of the bond issue amounts to GEL 20,000,000.

"The proceeds of the bonds to be issued in the local currency will enable FINCA Bank Georgia to respond to current market challenges and make Lari funding available to its customers. The issue will also positively contribute to the development of the local bond market. It's worth mentioning that this deal is historically the biggest GEL bond issue without IFI participation," said Vusal Verdiyev, CEO at FINCA Bank Georgia.

FINCA Bank Georgia plans to expand the financing of SME businesses with the sum attracted from issuing bonds. Denomination of bonds in the national currency will avoid exchange rate risks for borrowers.

"The deal will enhance the availability to capital from the business sector and contribute to economic growth," said Goga Japharidze, Commercial Director at PASHA Bank Georgia.

PASHA Bank is headquartered in Baku. It operates in Azerbaijan, Georgia and Turkey. PASHA Bank offers full corporate and investment banking service to small and medium sized enterprises. PASHA Bank is a part of PASHA Group, leading investment holding in Azerbaijan. It holds assets in different directions, like insurance, corporate and retail banking, property management, construction and tourism. The capital of the holding exceeded EUR 3 billion as of December 2014.

PASHA Bank entered the Georgian market in February 2013. Its share of capital is worth GEL 103 million.

Source: Finchannel

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