Washington D.C., June 13, 2005—The International
Finance Corporation, the private sector arm of the World Bank Group, is
providing a financing package of around $45 million equivalent to Banca
Transilvania in an agreement signed today in Bucharest by Ana Maria Mihaescu,
IFC’s chief of mission in Romania, and Robert C. Rekkers, director general
of Banca Transilvania.
IFC will be the lead investor in a bond issue by Banca Transilvania, by
subscribing to $20 million subordinated convertible bonds of a $25 million
issue. IFC is also providing Banca Transilvania with a Euro 20 million
loan to help expand the housing finance market in Romania.
The bonds will be convertible into the common shares of Banca Transilvania.
They represent a new instrument of significant importance for Romania’s
banking sector, as this is the first time that a locally owned bank will
raise subordinated capital through a public offering.
IFC’s funding will also give further momentum to the bank’s mortgage
lending operations, which currently exceed $100 million and account for
10 percent of the country’s mortgage market. The loan is part of
IFC's wider strategy to develop housing finance through mortgage origination.
Jyrki Koskelo, IFC's Director for Global Financial Markets noted, “We
are pleased to support Banca Transilvania in launching its convertible
subordinated bond, not only the first bond issued by BT, but also the first
instrument of its kind in Romania. The bond will strengthen the capital
of Banca Transilvania. It paves way for other Romanian banks to tap
public markets to raise subordinated capital in the future and facilitates
the creation of deeper and broader capital markets in Romania.”
Robert Rekkers, Banca Transilvania's director general, said, “Today IFC
became one of the strategic partners of Banca Transilvania, supporting
not only our lending activity, through the mortgage designated credit line,
but our bank’s whole development process, by helping strengthen our capital
base. With IFC's assistance, we managed to prepare the first issue
of foreign currency subordinated convertible bonds in Romania."
Ana Maria Mihaescu, chief of IFC’s mission in Romania, added, “This transaction
highlights IFC’s continued support to strengthening the local banking
sector and our commitment to reliable local partners. The loan included
in the funding package is IFC’s second mortgage loan to Banca Transilvania.
It addresses the demand for better quality housing in this market.”
Banca Transilvania is part of the Banca Transilvania Financial
Group. In the 11 years since its inception, it has grown into a large financial
institution, with more than 150 business units and over 2,400 employees.
The bank’s market share has increased continuously, and Banca Transilvania
is now one of the country’s 10 largest banks. In 2004, it was named “The
Bank of the Year” by “Piata Financiara” magazine.
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.