Page 52 - GEORptAug21

Fitch confirms final rating for Georgia Railway “green bond”
Georgia completes issuance of $500mn eurobond with 2.75% coupon
carried out by G&T.
“We are pleased that Georgian Leasing Company has carried out the new successful placement of bonds on the domestic market. The demand for the mentioned securities has exceeded our expectations and indeed, this fact proves the creditworthiness of our company and the high professionalism of Galt&Taggart. We are also proud that our cooperation has continued for many years,” Georgian Leasing Company director general Eldar Akhvlediani noted. “I am happy to hail Galt & Taggart’s role in the successful placement of Georgian Leasing Company’s bonds. This is an unprecedented placement with the low coupon rate on USD-denominated bonds and the first placement of EUR-denominated bonds. I congratulate the team of Galt & Taggart on how it has become Georgia’s leading supplier of investment-banking services thanks to its experience and professionalism,” Galt & Taggart managing director Otar Sharikadze said.
Fitch Ratings announced on June 16 that it has assigned Georgian Railway's $500mn senior unsecured fixed coupon (4.00%) green eurobond due 17 June 2028 a final long-term rating of BB-.
Global Capital announced on June 10 a benchmark offering range of 4.375%-4.5% for the 7-year issue.
The assignment of a final instrument rating is contingent on the successful placement of the eurobond and the completion of tender offer with exit consent for the company's existing $500mn 2022 notes, the rating agency said on May 26 when assigning the provisional rating to the bond. This implies that the prerequisites (the exit consent and the issue of the new bond) were met - although Georgian Railway has not yet announced anything in this regard to the London Stock Exchange where both the maturing (2022) and the new bonds are (or will be) listed.
However, Georgian Railway published on June 16 a Prospectus document related to the new bond, dated June 15.
“The final rating was assigned following the receipt of final documents conforming to information already received and details regarding the amount, coupon rate, and maturity,” Fitch stated, along with the confirmation of the final rating for the new bond.
The final rating is the same as the expected rating assigned on 26 May 2021. Last November, Fitch affirmed Georgian Railways' Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) at 'BB-' with a negative outlook. 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.
52 GEORGIA Country Report August 2021 www.intellinews.com