Bucharest, September 15, 2005—The
International Finance Corporation, the private sector arm of the World
Bank Group, today promoted the development of Romania’s capital markets
by subscribing to $20 million of subordinated convertible bonds issued
by Banca Transilvania.
The bonds mark a new and important instrument for the Romanian banking
sector. For the first time a locally owned bank has raised subordinated
capital through a public offer. The convertibility option gives the bondholders
the right to exchange their bonds into common shares using a predefined
Jyrki Koskelo, IFC's director for Global Financial Markets said, “We are
pleased to support Banca Transilvania in issuing the first instrument of
its kind in Romania. It strengthens the bank’s capital base and
paves the way for other Romanian banks to use this type of transaction
to tap into public markets for subordinated capital. The bond furthers
the creation of deeper and broader capital markets in Romania.”
Robert Rekkers, Banca Transilvania's director general, said, “IFC is a
trusted partner of Banca Transilvania. We are glad that we were able
to make Romania’s first issue of foreign-currency subordinated convertible
bonds with the support of IFC’s financial structuring expertise."
Ana Maria Mihaescu, IFC’s chief of mission in Romania, said, “The development
and structuring of this instrument is a good example of what partnership
and innovation can achieve in emerging market countries. We are happy with
the result, both in terms of the instrument’s solid and transparent structure
and its impact on the development of Romanian regulatory base.”
Banca Transilvania offered $25 million of subordinated convertible bonds
to allow its existing shareholders to exercise the preemption right between
September 2 and 8, 2005. IFC purchased $20 million as a lead investor for
the second tranche, which was offered to a broader public.
The subscription documents were filed today by Hayhurst Robinson, IFC’s
legal advisers, in Cluj-Napoca at the headquarters of BT Securities, the
lead manager for the bond issue.
Banca Transilvania is the core of the Banca Transilvania
Financial Group. In its 11 years of activity, it has become a nationwide
financial institution, with more than 150 business units and more than
2,400 employees. Its market share has increased steadily, making
Banca Transilvania one of Romania’s top 10 banks. In acknowledgement of
its excellent results, in 2004 Banca Transilvania was named “Bank of the
Year” by Piata Financiara magazine. For more information, visit
the bank’s web site: www.bancatransilvania.ro.
The mission of IFC (www.ifc.org)
is to promote sustainable private sector investment in developing countries,
helping to reduce poverty and improve people’s lives. IFC finances private
sector investments in the developing world, mobilizes capital in the international
financial markets, helps clients improve social and environmental sustainability,
and provides technical assistance and advice to governments and businesses.
From its founding in 1956 through FY04, IFC has committed more than $44
billion of its own funds and arranged $23 billion in syndications for 3,143
companies in 140 developing countries. IFC’s worldwide committed portfolio
as of FY04 was $17.9 billion for its own account and $5.5 billion held
for participants in loan syndications.