Page 37 - bne IntelliNews Georgia country report October 2017

Moody's said it continues to assess Georgia's Macro Profile (operating environment for banks) as Weak+. Therefore, Georgian banks' standalone BCAs were unaffected by the upgrade of the sovereign rating.
“The rating agency's assessment incorporates the funding challenges posed by the large quantity of foreign-currency deposits, that account for two-thirds of total deposits (mostly US dollars) and a material amount of non-resident deposits, which are more confidence sensitive. The system also faces credit risks related to a high level of foreign-currency lending to borrowers with no foreign-currency income and Moody's expectation of a rapid rate of credit growth, above nominal GDP, over the next 12-18 months. Higher risk-weighting for unhedged foreign-currency loans and an efficient foreclosure process partially mitigate these risks,” the agency stated.
8.5 Fixed income
8.5.1 Fixed income - bond news
IFC purchases $45mn worth of Bank of Georgia’s inaugural eurobond
The International Finance Corporation (IFC) has invested GEL108.34mn ($45mn) in Bank of Georgia's inaugural eurobond , the multilateral lender announced on June 2.
In late May, Georgia's second largest bank issued a GEL500mn, lari-denominated eurobond, to be listed on the Irish Stock Exchange with a maturity of three years. The IFC's decision to purchase a fifth of the coupons amounts to a vote of confidence in the Georgian currency and economy.
The small country in the South Caucasus has been a regional leader in economic growth over recent years. This has translated into increased interest from foreign investors in sectors like construction, transport, infrastructure and hospitality.
Together with TBC Bank, Bank of Georgia holds two-thirds of the banking sector assets in the country. The two lenders are both listed in London.
The IFC acted as an anchor investment for Bank of Georgia's issuance, offering to purchase up to 30% of the bonds upfront. In total, about 20 international investors purchased the entire offering, the IFC said in a press release.
"This landmark bond has as much a development, as a funding purpose. The successful completion of the issuance has greatly expanded the investor base in lari and, I hope, will deepen local fixed income and currency markets," Kaha Kiknavelidze, the CEO of Bank of Georgia, said.
37 GEORGIA Country Report October 2017 www.intellinews.com