Bucharest, Romania, July 11, 2018—IFC,
a member of the World Bank Group, is investing €120 million in subordinated
bonds issued by Banca Transilvania (BT), Romania’s second-largest bank
by assets, to strengthen its capital base and growth, and help deepen the
country’s financial markets.
IFC is the lead investor in the 10-year
maturity bond issuance—the first subordinated debt issuance listed on
the Bucharest Stock Exchange, which raised €285 million with the participation
of other international financial institutions. The bond is compliant with
the European Union’s Capital Requirements Regulation and Capital Requirements
Directive IV, and the first ever Basel 3 Tier 2 instrument on the Romanian
market. It will count as Tier 2 capital – the secondary component of bank
capital after core capital, which includes equity and disclosed reserves.
“We are delighted with our investors'
confidence and appetite for this transaction, which is a first for the
Romanian market, and will help strengthen our development,” said Omer
Tetik, BT's Chief Executive Officer. “The fact they are exclusively
high-caliber global players like IFC and EBRD also speaks volumes about
the strength of this issuance.”
IFC’s relationship with Banca Transilvania
dates back to 2004, when it first extended a senior loan to the bank for
mortgage on-lending. Since then, IFC has invested in a series of senior,
subordinated, and convertible debt instruments for the bank and has also
been a shareholder since 2009. A stronger capital base will help bolster
BT's financial resilience and support its future growth strategy.
“Our investment builds on previous
successes in 2005 and 2013, when IFC and BT partnered on issuing Romania’s
first convertible subordinated bonds, with IFC again the lead investor,”
said Manuel Reyes Retana, IFC Regional Head, Financial Institutions Group
for Europe, Middle East and North Africa. “We hope this will test the
market and pave the way for similar issuances to help deepen Romania’s
IFC’s financial markets strategy in
Central and Southeastern Europe is to partner with systemic banks to sustain
economic growth and job creation. Romania became an IFC member in 1990,
and IFC has invested a total of approximately $3 billion in the country
since then. IFC has invested across a variety of sectors and works to provide
access to finance for smaller businesses in Romania and the broader region.
IFC—a sister organization of the World Bank and member of the World Bank
Group—is the largest global development institution focused on the private
sector in emerging markets. We work with more than 2,000 businesses worldwide,
using our capital, expertise, and influence to create markets and opportunities
in the toughest areas of the world. In FY17, we delivered a record $19.3
billion in long-term financing for developing countries, leveraging the
power of the private sector to help end poverty and boost shared prosperity.
For more information, visit www.ifc.org