TBC Leasing, with the help of TBC Capital, places 58.4 million GEL bonds on the Georgian Stock Exchange17 Apr, 2020
With the support of TBC Capital, TBC Leasing has placed 58.4 million GEL bonds on the Georgian Stock Exchange as a public issue. This is the largest public issue denominated in GEL among non-bank financial institutions ever implemented in Georgia.
Georgian commercial banks have invested in bonds, which use securities to attract additional GEL from the National Bank. The total value of the bonds at this stage is GEL 58.4 million, although it is planned to increase this to GEL 70 million in the future.
Importantly, TBC Leasing has succeeded in extending its existing liabilities from 18 to 36 months. The percentage of securities is variable and amounts to 3.25% added to the 3-month interbank rate in Tbilisi.
The issuance of TBC Leasing bonds by TBC Capital is an important transaction for several reasons. It is noteworthy that this is the largest ever issue by a non-international financial institution in Georgia. The transaction is important for investor banks, as they have the opportunity to attract additional resources from the National Bank by transferring the issuer's loans into bonds. This is quite a rare occurrence, as secured bonds are not often issued in this market. The bonds are secured by a leasing portfolio, which further reduces the credit risk for investors.
"The transaction is a good example of cooperation between TBC Capital and the issuing company, which is another step forward in the development of securities trading in our country," said Mary Chachanidze, managing director of TBC Capital.
The bonds are secured by the TBC Leasing portfolio which means that the investor is more protected than in the case of unsecured securities. Investing in liquid securities offers flexibility for the investor and the opportunity to diversify their portfolio. "We are pleased that TBC Leasing securities have been successfully placed on the stock exchange through TBC Capital. TBC Leasing will use the resources received from these bonds to refinance short-term loans and also increase the total amount of resources attracted in GEL, which is especially problematic in the local market today. At the same time, TBC Leasing's application for a public offering confirms that our company is becoming more transparent and accessible to investors. These are 3-year secured securities where the investor is more protected,” said Gaga Gogua, general manager of TBC Leasing.
TBC Leasing will repurchase the bonds in 3 years from March 2023. The company has the right to pre-purchase the bonds 1 year after the issue.
The National Bank approved the issuance of securities on March 17 and the placement took place on March 20. The transaction is the culmination of close cooperation by investors and the National Bank and was closed during the early days of COVID-19’s arrival in Georgia.