Source: Micro Finance Bank of Azerbaijan (MFBA).
Original press release not available online.
BAKU, AZERBAIJAN, March 03 – The second closing on Micro Finance Bank of Azerbaijan’s (MFBA’s) debut bond issue was completed today. Under the second closing additional bonds providing senior debt to Micro Finance Bank of Azerbaijan in the amount of USD 13.6 million and a term of four-and-a-half years were issued to international capital markets investors through a Luxembourg securitization vehicle. This was in addition to the USD 11.4 million in bonds with a term of five years that was issued under the first closing completed on 29 August 2007, for a total of USD 25 million. The funding will be used by MFBA for on-lending to Azeri small business. This was the second closing on a historic landmark transaction that was a triple “first”:
- the first international capital markets bond issue for MFBA,
- the first international capital markets bond issue for an Azeri issuer and
- the first international capital markets bond issue for a single microfinance lender anywhere.
The transaction marks a historic step in the development of capital markets both for Azerbaijan and the world of microfinance. The MFBA Bond I remains the only Azeri Bond on international capital markets as planned debuts by other issuers have been postponed due to the uncertain market conditions.
MFBA General Manager, Dr Andrew Pospielovsky said: “The successful second closing of this bond, in such turbulent market conditions, is another demonstration of capital market confidence in MFBA and the microfinance sector. This is another historic step in the development of microfinance as an asset class for investors. MFBA is proud to be making this small contribution to the development of microfinance together with DWM.”
The bonds were issued in Luxembourg by MFBA Bond I, a special-purpose legal vehicle. The proceeds of the Bond will be used to provide a senior loan to MFBA for financing its portfolio growth. The bond issue was sponsored and arranged by Developing World Markets (DWM), a US-based socially responsible financial group. DWM assists micro- and small businesses throughout emerging markets to enter the international capital markets.
Micro Finance Bank of Azerbaijan was established in 2002 to provide financial services to Azeri small business. It is 100% foreign-owned by six shareholders: the European Bank of Reconstruction and Development, the International Finance Corporation, the Black Sea Trade and Development Bank, KfW Development Bank – the Development Bank of the German Government, LFS Financial Systems GmbH – a German consulting company that is the technical partner for the bank and AccessHolding – a strategic investor in microfinance. Participation of such international organizations in the activity of the bank strengthens our customers’ trust and confidence in MFBA.
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