Page 52 - GEORptOct21

Georgia completes issuance of $500mn eurobond with 2.75% coupon
Georgian oil company GOGC refinances $250mn eurobonds with EBRD loan
The bond, already certified as a “green bond”, reflects the company’s commitment to compliance with the Green Bond Principles 2018 (GBP). Under GBP, Georgian Railway will publish a Green Bond Allocation and Impact report annually on its website until a full proceeds allocation to green projects under the category of “clean transportation” and in the event of a material change. Like the bond it refinances, the new Georgian Railway eurobond will be listed on the London Stock Exchange. Citi and JP Morgan are the leads on the deal, while Renaissance Capital and TBC Capital are lead managers and bookrunners. JP Morgan is acting as a development finance structuring agent.
The Ministry of Finance of Georgia recently successfully completed the issuance of 5-year eurobonds worth $500mn with a 2.75% coupon, Minister of Finance Lasha Khutsishvili has announced on his Facebook page.
In a note, Russian bank VTB said it concluded that “the fair yield level for the new 5-year Georgian bond is in the 2.8% area.”
Khutsishvili thanked the international and local investment banks involved in the issuance.
"I would like to thank all the international investment banks (JP Morgan, Goldman Sachs, ICBC Standard) and local investment banks (TBC Capital and Galt & Taggart) involved in the transaction, thev've made a significant contribution to the successful implementation of this stage of the transaction. I will talk to the media about this topic in detail tomorrow," the finance minister wrote on April 15.
The new $500mn of foreign debt will refinance eurobonds issued in 2011. The deadline to repay the principal, namely $500mn, came on April 12. According to the finance ministry, Georgia repaid this obligation from its own funds last week.
The European Bank for Reconstruction and Development (EBRD) is to extend a €217mn senior unsecured loan to state-owned Georgian Oil and Gas Corporation (GOGC) for the refinancing of a $250mn eurobond that matures in April 2021, the EBRD said in a statement.
The funding agreement was made in response to the economic shock caused by the coronavirus (COVID-19) pandemic.
In addition, the financial package is to support planned reforms at the state company, including the development of a natural gas exchange.
The loan will improve the liquidity of GOGC, which has been damaged by the economic impact of the COVID-19 crisis, and will alleviate difficulties in tapping the capital market, the EBRD said.
The corporation is one of the largest state-owned companies.Its revenue increased by 37% to Georgian lari (GEL) 880.6mn ($330mn) in 2019. Net profit fell 22.8% to GEL121.4mn in the year. Despite declining profits, GOGC was still one of the most profitable state-owned enterprises in Georgia in 2019.
The total assets of GOGC include main gas pipelines, as well as the combined cycle power plants Gardabani 1 and Gardabani 2—the latter of which was officially put into operation at the end of 2019. The two power plants account for 20% of the country's electricity consumption and also provide balancing system services for intermittent production at hydropower plants.
It was in 2012 that GOGC issued a $250mn eurobond and listed it on the London Stock Exchange. In April 2016, it refinanced the eurobond, with a deadline for repayment of April 26, 2021.
52 GEORGIA Country Report October 2021 www.intellinews.com