Press Releases
print

IFC Purchases $20 Million in Bonds Issued by Banca Transilvania


In Washington
Rita Jupe

Phone: + (1) 202 458-8967

Email:
rjupe@ifc.org


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 formula.

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.