Page 40 - GEOGRptJun19

driven by support from BoG(BB-/Stable). Its view of the probability of support being forthcoming was based on full ownership, close integration and a record of capital and funding support.
Fitch also noted that a significant and sustained improvement of the company's performance and prospects, and a greater strategic alignment within the parent group would, in its view, increase BoG's propensity to support the company and could drive the equalisation of the ratings with the parent.
Fitch reported that a material weakening of BoG's propensity or ability to support the company might result in a wider differential in the awarded rating notches from the parent.
On April 16, Fitch affirmed the Long-Term IDRs of TBC Bank Group (TBC) and Bank of Georgia (BoG) at BB- and revised their Outlooks to Stable from Positive. The revision of the Outlooks on TBC and BoG to Stable from Positive reflected the rating agency’s view of still significant risks associated with continued rapid loan growth and sizable foreign currency (FC) lending.
8.5 Fixed income
8.5.1 Fixed income - bond news
Georgia’s Silknet raises $200mn with eurobond issue
Anaklia deep sea port consortium in Georgia plans to issue shares
Silknet, Georgia’s leading telecommunications operator, on March 27 announced that it has successfully raised $200mn from a 5-year, senior unsecured eurobond issue priced at 11%.
The subsidiary of Silk Road Group is the largest telco in the entire South Caucasus region.
“Investors taking advantage of this issuance will benefit from unrivalled exposure to Georgia, the former CIS's most promising success story for its entrepreneurial business environment,” said David Mamulaishvili, Silknet’s CEO.
Silknet is wholly-owned by Rhinestream Holdings Limited, an entity incorporated in Malta. It is ultimately controlled by Giorgi Ramishvili, the founder of Silk Road Group.
Last March, Silknet paid $152mn for 100% in Georgia’s largest mobile operator Geocell , which has a 35% market share. Silknet at that point said at that time that it held 41% of Georgia’s fixed internet segment, 30% of the broadcast transit (pay TV) segment and 48% of the fixed telecoms segment.
The $200mn bond was subscribed to by investors from a wide range of geographies. The paper is expected to be given a rating of B1 by Moody’s and B+ by Fitch, in line with Silknet’s long-term issuer credit rating.
The bond is set to be listed on the Global Exchange Market of Euronext Dublin. JPMorgan, UBS and TBC Capital were joint lead managers. Dentons UK and Middle East and Dentons Georgia were legal advisors to Silknet, while Latham & Watkins and BGI Legal were acting as legal advisors to the joint lead managers.
Anaklia Development Consortium (ADC) intends to issue shares in the planned Anaklia deep sea port project in Georgia. It has addressed the National Bank of Georgia on the issue, InterPressNews has reported.
It remains unclear why Georgia’s central bank should green light ADC issing shares.
40 GEORGIA Country Report June 2019 www.intellinews.com