TBC Bank prices US$75 million Additional Tier 1 Capital Perpetual Subordinated Notes4 Nov, 2021
JSC TBC Bank (the "Bank"), the leading bank in Georgia, successfully priced a US$75 million 8.9% yield Additional Tier 1 Capital Perpetual Subordinated Notes issue (the "Notes"). The Notes are being offered and sold in accordance with Rule 144A and Regulation S. This is the first ever AT1 transaction with a Development Finance qualification.
Barclays, Citigroup, J.P. Morgan and Renaissance Capital are acting as Joint Bookrunners and Joint Lead Managers for the Notes, and TBC Capital is acting as Joint Lead Manager. Baker & McKenzie LLP and Dentons Georgia LLC are acting as legal advisors to the Bank, while Latham & Watkins LLP and BGI Advisory Services Georgia LLC are acting as legal advisors to the Joint Lead Managers.
The 2 day marketing campaign consisted of a global investor call and a series of virtual investor meetings with key EM accounts in UK, Europe and US.
Having attracted indications of interest that exceeded the target deal size, TBC Bank released price guidance of 9.00-9.25% for a U.S.$75-100mm transaction at 10:30UKT.
The orderbook grew to over US$200mm with early IoIs converting to firm orders and allowed TBC bank to set the final guidance at 8.90-8.95% WPIR for a US$75mm offering. The transaction priced with a final yield of 8.90%, at the tight end of final guidance, having attracted strong interest from a diverse investor base. The yield of 8.90% represents a 1.85% improvement compared to TBC Bank’s previous AT1 transaction in June 2019.
This offering allows TBC Bank to optimize its capital structure and strengthen the capital position by adding 1.24% to its AT1 ratio in anticipation of future growth. The AT1 also provides a natural hedge against the dollarized balance sheet economy.
Vakhtang Butskhrikidze, CEO, TBC Bank, commented: "We are happy that the new issue attracted solid demand from investors across EU, UK and US evidencing strong investor appetite for TBC's quality credit story. The AT1 issue will allow TBC Bank to maintain an efficient capital structure and strong capital base to fund mid-term growth opportunities".
The book building followed a series of debt investor meetings and enjoyed strong investor appetite with an orderbook that peaked at over US$200 million, including a wide geographic distribution, represented by significant uptake in the UK, Switzerland and other Europe.
The Notes are expected to be listed Euronext Dublin's Global Exchange Market on or about 4 November 2021 and to be rated B- by Fitch.