IFC Helps Mobilize Long-Term Financing for Georgia’s Private Sector

TBILISI - An International Finance Corporation (IFC), member of the World Bank Group, is investing $25 million in bonds issued by JSC BGEO Group, a leading Georgian industrial and banking group, in a landmark transaction to help channel international investment into Georgia and spur private sector development.

As the sole anchor investor in the transaction, IFC announced its commitment to invest up to $70 million, or over 20 percent of BGEO’s initial planned issuance, to support the offering during the investor roadshow. The bonds were eventually oversubscribed by over two times and upsized from $300 million to $350 million, reflecting IFC’s contribution to the transaction. IFC is now accepting an allocation of $25 million to provide more space for other private sector investors.

The seven-year bonds are the longest-dated issuance by a Georgian private company in international capital markets and the first corporate bonds out of Georgia to be included in the CEMBI index, an international benchmark that tracks US-dollar-denominated corporate bonds issued by emerging market entities.

“IFC's bid has supported us hugely in building investor confidence,” said Irakli Gilauri, CEO of BGEO Group. “Over 90 institutional investors from the US, UK, Switzerland, Germany, Austria, and other countries placed orders, which we are delighted about given the current market conditions. This landmark issuance helps BGEO obtain financing of a tenor and price that are not currently available in the country.”

Stefan Weiler, head of CEEMEA Debt Capital Markets at J.P. Morgan, a lead arranger of the deal, said: “BGEO Group’s international bond offering was a complex transaction that achieved several significant market milestones. IFC’s participation and anchor order commitment contributed significantly to its overall success and enabled BGEO to achieve optimal terms with regard to tenor, size, and final pricing.”

Jan van Bilsen, IFC Regional Manager for the South Caucasus, said: “We are very pleased with the success of the issuance and the role that IFC was offered and able to play. By helping an important company in Georgia issue the offshore bond with long-term maturity, we hope to pave the way for more Georgian private issuers to tap international capital markets, diversify their funding sources, and contribute to economic growth. Capital markets create access to long-term financing that enables businesses to focus on expanding and creating jobs.”

JSC BGEO Group is a Georgia-based subsidiary of BGEO Group PLC, listed on the London Stock Exchange, and operates in several key sectors including banking, healthcare, real estate, utilities and insurance. BGEO’s Bank of Georgia is the largest bank in the country and a long-term client of IFC.

Georgia became an IFC member in 1995. Since then, IFC has provided about $1.2 billion in long-term financing, of which $373 million was mobilized from partners, in 55 projects in financial services, agribusiness, manufacturing, and infrastructure. In addition, IFC has supported around $315 million in trade through its trade finance program, and implemented a number of advisory projects focused on developing the private sector.