Page 43 - GEORptDec20

($1.1 bn, 7% of GDP) anti-crisis package. Out of this, nonetheless, at least GEL1.1bn will be loans extended to banks (as opposed to expenditures).
Fitch expected that Georgia's fiscal deficit should narrow towards 5.0% of GDP in 2021 due to the fading of one-off expenditure and recovery in economic growth.
General government debt is projected to increase significantly, from 39.8% at end-2019 to 59.4% of GDP in 2020, before declining moderately to 56.3% in 2021, according to the forecast of Fitch.
Fitch expected the global economy to go through a deep but short-lived recession in 2020 due to the pandemic. In particular, eurozone GDP was expected to fall by 7.0% in 2020, followed by 4.3% growth in 2021. The rating agency noted “an unusually high level of uncertainty around these forecasts with the risks firmly to the downside.”
8.5 ​Fixed income
8.5.1​ ​Fixed income - bond news
Georgian oil company GOGC refinances $250mn eurobonds with EBRD loan
Galt & Taggart places fifth $2mn bond for Georgian Leasing Company
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.
Galt & Taggart has announced that it secured the successful placement of another $2mn of 2-year bonds of Georgian Leasing Company to be listed on the local stock exchange.
This is the fifth issue for Georgian Leasing Company, which is said to show the stability of the company and the high degree of trust from investors. “Considering the events of the current year, the successful completion of this issue is a very positive sign for both the company and the Georgian securities market,” G&T’s press release stated.
43​ GEORGIA Country Report ​December 2020 ​ ​www.intellinews.com