TBC and FMO sign EUR 80 mln Subordinated Facility

TBC Bank Group PLC

26 January 2024

 

TBC and FMO sign EUR 80 million Syndicated Subordinated Facility

TBC Bank Group PLC ("TBC PLC") announces that its subsidiary, JSC TBC Bank ("TBC Bank"), has signed a syndicated subordinated loan agreement in the amount of EUR 80 million with the Dutch entrepreneurial development bank FMO and its syndicate members. The loan facility bears a maturity of ten years and qualifies as Tier 2 capital under the Basel 3 framework. This funding will strengthen TBC's capital position, increase its long-term resilience, and support the bank's sustainable growth.

Within this agreement, FMO acted as the mandated lead arranger and will serve as facility agent as well. FMO has provided funding in syndication with other 5 lenders and participants, including new financiers such as the Finnish development financier and impact investor, Finnish Fund for Industrial Cooperation Ltd. ("Finnfund"), the Danish development financier and impact investor, the Investment Fund for Developing Countries ("IFU") and an SDG-focused emerging market credit fund, ILX Fund ("ILX"). Existing long-standing partners of TBC Bank, BlueOrchard Microfinance Fund ("BOMF") and Green for Growth fund ("GGF") were also part of the syndicate. This is the largest syndicate Tier 2 facility provided by FMO under the new Basel 3 framework.

Vakhtang Butskhrikidze, CEO of JSC TBC Bank, said: "We are proud to be the recipient of this landmark facility in partnership with six lenders. This funding will strengthen TBC's capital position and support its sustainable growth, with a strong focus on inclusive financing, which is a shared commitment and priority of all syndicate members. FMO was the first partner institution for TBC, with whom we successfully accomplished a debut syndicated subordinated facility a decade ago, and execution of another benchmark transaction is testament of well-established, strong partnership between our institutions.  We are particularly proud that this syndicated facility enables TBC to onboard new investors such as IFU, Finnfund and ILX, which serves as a good foundation for future cooperation.  We would like to express our gratitude to FMO for having arranged this landmark transaction and also thank all syndicate participants for their trust and valuable contributions. We look forward to executing many more successful deals in the future".

Ruhi Cosgun, Manager Financial Institutions ECA MENA at FMO, adds:  "TBC Bank is a longstanding client of FMO, over the years resulting in broader cooperation with entities of the group. The group has excellent reputation with robust policies in place and adhering to international best standards. We are therefore very confident and proud to be the lead arranger of this facility, that also onboards new investors in TBC. The facility will be used to strengthen the capital base of TBC bank and to enable the increase of the green portfolio. We want to thank TBC and our investment partners for this impactful cooperation".

The Ambassador of the Kingdom of the Netherlands, Meline Arakelian, welcomed the signing of syndicated subordinated loan agreement with the TBC Bank: "The agreement is another step in FMO's investment in the Georgian economy, which will contribute to further strengthen the Georgian financial sector. The loan has a strong focus on inclusive green financing - a shared priority of FMO and all syndicate members. The agreement signals the Netherlands' strong commitment to support Georgia's inclusive economic growth and is an example of our long-standing engagement in Georgia's financial sector".

Barbara Marcussen, Investment director at IFU said: "This is the first time that IFU joins a syndication led by FMO. Our goal is to support SMEs in Georgia build efficiency and resilience in light of increasing environmental challenges that we face globally. We are proud to partner with TBC Bank, a pioneer in sustainable finance in the country".

Ulla-Maija Rantapuska, Investment Manager of Finnfund said: "Finnfund is pleased to be part of the syndicated loan, that will enable the growth of TBC's green loan portfolio. It is great to see that TBC strives to act as a role model in responsible and climate aware financial service provider, manifested in its ESG strategy, which targets net zero emissions and sets KPIs for sustainable loan portfolio".

About FMO

FMO is the Dutch entrepreneurial development bank. As a leading impact investor, FMO supports sustainable private sector growth in developing countries and emerging markets by investing in ambitious projects and entrepreneurs. FMO believes that a strong private sector leads to economic and social development and has a 50+ year proven track-record in empowering entrepreneurs to make local economies more inclusive, productive, resilient and sustainable. FMO focuses on three sectors that have high development impact: Agribusiness, Food & Water, Energy, and Financial Institutions. With a total committed portfolio of EUR ~13 billion spanning over 85 countries, FMO is one of the larger bilateral private sector development banks globally. For more information, please visit www.fmo.nl 

About IFU:

IFU - the Investment Fund for Developing Countries is a Danish impact investor contributing to green, just and inclusive societies as well as supporting the Sustainable Development Goals. IFU provides risk capital to companies operating in developing countries across Africa, Asia, Latin America and parts of Europe. Investments are made on commercial terms in the form of equity, loans and guarantees. IFU has co-invested in over 1,300 companies in more than 100 developing countries and emerging markets. Capital under management is EUR 2.1 billion.  Read more at www.ifu.dk

About Finnfund
Finnfund is a Finnish development financier and impact investor. We build a sustainable future and generate lasting impact by investing in businesses that solve global development challenges. We invest 200-250 million euros in 20-30 companies in developing countries each year. Our focus sectors include renewable energy, sustainable forestry, sustainable agriculture, financial institutions, and digital infrastructure and solutions. Today Finnfund's investments, commitments, and investment decisions total about 1.22 billion euros, half of them in Africa. The company has 100 employees based in Helsinki and Nairobi. For more information, please visit www.finnfund.fi

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About TBC Bank Group PLC ("TBC PLC")

TBC Bank Group PLC ("TBC PLC") is a public limited company registered in England and Wales. TBC PLC is the parent company of JSC TBC Bank ("TBC Bank") and a group of companies that principally operate in Georgia in the financial sector. TBC PLC also offers non-financial services via TNET, the largest digital ecosystem in Georgia. Since 2019, TBC PLC has expanded its operations into Uzbekistan by operating fast growing retail digital financial services in the country. TBC PLC is listed on the London Stock Exchange under the symbol TBCG and is a constituent of the FTSE 250 Index. It is also a member of the FTSE4Good Index Series and the MSCI United Kingdom Small Cap Index.

TBC Bank, together with its subsidiaries, is a leading universal banking group in Georgia, with a total market share of 39.1% of customer loans and 37.5% of customer deposits as of 30 September 2023, according to data published by the National Bank of Georgia on the analytical tool Tableau.

 

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