22nd Mar 2019 08:07
LONDON (Alliance News) - Bank of Georgia Group PLC said Friday its main banking subsidiary had issued USD100 million in loan notes in order to expand its capital ratio.
JSC Bank of Georgia issued its inaugural USD100.0 million 11.125% additional tier one capital perpetual subordinated notes at an issue price of 100%.
The notes will be callable after 5.25 years and on every subsequent interest payment date.
In 2018, Bank of Georgia Group reported GEL437.5 million pretax profit on revenue of GEL1.03 billion. This is equivalent to pretax profit of USD163 million on revenue of USD384 million.
"I am delighted that Bank of Georgia has issued the first ever Additional Tier One Capital Notes from Georgia and the South Caucasus region," Bank of Georgia Chief Executive Officer Archil Gachechiladze said.
"Basel III regulations recently introduced in Georgia enable this type of capital optimisation and this US dollar issue provides the bank with an opportunity to diversify our capital structure from a foreign currency perspective and provide a natural hedge against dollarisation in the economy," Gachechiladze added.
Bank of Georgia expect the loan issue to add 230 basis points to its tier one capital ratio.
In order to "reduce the carry-cost of this new issuance", however, the firm intends to use some of the funds raised to repay a portion of its existing tier two capital instruments. This is subject to regulatory approval from the National Bank of Georgia.
Shares in Bank of Georgia were 2.0% higher at 1,693.60 pence on Friday.
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