The Asian Development Bank (ADB) has raised GEL64 million (approximately $30 million) from a Georgian lari denominated bond sale to support development of the local capital market and microenterprises in Georgia.
“Microenterprises play a critical role in employment creation in Georgia and getting better access to bank financing will help them to grow,” said Pierre Van Peteghem, ADB Treasurer. “ADB’s second lari denominated bond will help strengthen the Georgian bond market and provide critical support to the microfinance sector.”
The proceeds of the bond issue will be lent to Credo Microfinance Organization and Finca Bank Georgia, two microfinance lenders, to provide loans to microenterprises in Georgia. The issue will support the implementation of $30 million in ADB loans provided earlier this year to the two lenders to expand their support to small enterprises and to reach clients in remote areas of the country.
The onshore bond issue pays a floating rate of interest indexed to the National Bank of Georgia 3 month CD reference rate, plus 20 basis points. The bonds will mature on 6 July 2019. The issue was solely managed and underwritten by Galt & Taggart and was privately placed.
ADB is a AAA rated issuer and the bonds meet the National Bank of Georgia’s requirements for use in repurchase transactions and enjoys zero-risk weighting.
“We welcome ADB’s initiative to foster the development of the capital markets in Georgia,” said Koba Gvenetadze, Governor of the National Bank of Georgia. “We fully support ADB’s continuing and growing interest in issuing local currency bonds denominated in Georgian lari and hope that this transaction will further increase interest from international and local investors.”
ADB is a regular borrower in the large international bond markets but has also led issuance in developing Asian countries as part of efforts to promote domestic bond markets as an alternative to bank lending. ADB plans to raise around $20 billion from the capital markets in 2016.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB in December 2016 will mark 50 years of development partnership in the region. It is owned by 67 members—48 from the region. In 2015, ADB assistance totaled $27.2 billion, including cofinancing of $10.7 billion.