Page 46 - GEORptDec19

should facilitate a quick recovery in credit metrics. The plant would contribute about GEL70mn ($26mn ) to GOGC's EBITDA starting from 2020, which should allow debt to EBITDA of below 4.0x and FFO to debt exceeding 20% from the same year.
8.5 ​Fixed income
8.5.1​ ​Fixed income - bond news
ADB issues first Georgian lari-denominated bond on offshore market
Georgian Oil and Gas Corporation to issue $300mn eurobond in 2020
The Asian Development Bank (ADB) on November 25 raised the equivalent of $28.6mn in Georgian lari (GEL), namely GEL85.05mn, from its first GEL-denominated bond issued on the offshore market.
“ADB is a strong supporter of local currency bond markets,” said ADB treasurer Pierre Van Peteghem.
“Not only does this bond issue contribute to the diversity of ADB’s local currency funding operations, but it also mobilizes investment from international savings pools while supporting a broader recognition and adoption of Georgia’s new risk-free benchmark interest rate,” he added.
The issue is structured as a linker bond denominated in Georgian lari but settled in US dollars, and is documented under ADB’s Global Medium-Term Note programme, subject to English law, settled in Clearstream and Euroclear and listed on the Luxembourg Stock Exchange. The bonds feature an amortising profile with final maturity in July 2021.
ADB has previously relied on bond issuance on the domestic Georgian capital market to support its local currency projects. This time, ADB turned to the offshore market to raise funds from international investors.
The bond issue was arranged by Merrill Lynch International and sold to a single US-based investor.
“The National bank of Georgia (NBG) welcomes ADB’s continued efforts to support local currency lending in Georgia,” said NBG vice governor Archil Mestvirishvili.
“We are also pleased to see new securities issues being linked to the TIBR interbank benchmark rate, which has been redesigned in line with latest global trends of risk-free rate reforms. We clearly feel greater interest in lari denominated securities as the currency becomes increasingly popular among emerging market investors.”
State-owned Georgian Oil and Gas Corporation (GOGC) has plans to refinance its eurobond that matures in 2020, ​according to Business Media Georgia​.
GOGC corporate finance director Omar Obgaidze reportedly said that that the company expected to issue new securities early next year.
The amount raised would refinance the due eurobond ($250mn) issued in 2016, with the remainder ($70-80mn) to be spent on the construction of a new third-generation thermal power plant in Gardabani.
According to Ogbaidze, the corporation issued bonds in US dollars in 2012 and 2016, but it was switching to euros to cut borrowing costs.
"As a result, our interest expense will be reduced," the corporation's financial director was cited as saying.
According to Ogbaidze, relatively favourable terms were also linked to an
46​ GEORGIA Country Report​ December 2019 ​ ​www.intellinews.com