OREANDA-NEWS. The Black Sea Trade & Development Bank (BSTDB) has raised GEL48 million (approximately USD 20 million), from its first-ever sale of bonds denominated in Georgian Lari, to support the development of the country's capital market and provide funding to smaller businesses. This bond is also the first local issuance in any member country with the aim of making investment in the same currency.

The proceeds of the bond issue will be used to extend a loan to TBC Bank, to support the provision of investment and working capital loans to small and medium-sized enterprises (SMEs) in Georgia. This GEL denominated SME loan facility will complement the existing USD 10 million SME Loan Facility and the USD 10 million Trade Finance Facility with TBC Bank.

Commenting on the deal, the BSTDB President, Ihsan Ugur Delikanli said: "Building on the strong cooperation we have developed with TBC Bank, this transaction is very important for BSTDB. Not only because the bond issue will assist with the development of the local debt capital market, but also because the loan to TBC Bank, made with the proceeds, will support economic growth and job creation in Georgia and eliminate FX risk. This transaction shows our innovative approach and increasing capacity to meet market demands; we hope that this deal will pave the way to similar bond issuances to finance our local currency investments in all our member countries".

"We are delighted to continue our partnership with BSTDB. The transaction is of great importance not only for TBC Bank but for the entire financial sector as it enables us to provide loans in local currency that are increasingly in demand from our customers and will enable TBC Bank to further strengthen its position in the SME segment. This transaction reflects both institutions' commitment to continue cooperation and we look forward to more years of productive partnership. In addition, the issuance of the bonds will support local capital market development," commented Vakhtang Butskhrikidze, CEO of TBC Bank.

"At TBC Capital we are fully committed to playing an active role in promoting capital market development in Georgia, which still remains at a nascent stage, but has been receiving increasing attention in recent years. The issuance of BSTDB bonds, comes just a few months after the largest local bond issue in Georgia, which was also arranged by TBC Capital. I would like to thank BSTDB for their cooperation in this important deal." George Shengelia, Managing Director of TBC Capital

The issue carries BSTDB's A-/A2 credit ratings and meets the National Bank of Georgia's quality requirement as a liquid asset for Georgian banks.

BSTDB sold the 3-year bonds at a price of par, with a floating rate coupon that resets quarterly based on the National Bank of Georgia's 3-month Certificate of Deposit. The bonds will mature on 1st November 2018.

The privately placed bond was managed by TBC Capital, a subsidiary of TBC Bank.