EBRD WILL HEDGE CURRENCY RISKS OF BYBLOS BANK ARMENIA’S CREDIT AT TCX

ArmInfo
30.04.2010

ArmInfo. The European Bank for Reconstruction and Development will
hedge the currency risks of Byblos Bank Armenia’s synthetic credit
at TCX Investment Management Company, says the head of the Finance
and Administration Department of Byblos Bank Armenia Hayk Stepanyan.

To remind, in Mar 2010 EBRD and Byblos Bank Armenia signed a
$10mln credit agreement. This the first EBRD loan in Armenia having
a national currency component. This program is aimed at crediting
private companies and includes a synthetic AMD loan equivalent to
$5mln. This money will be spent on financing of local businesses and
circulating capital. The remaining $5mln will be spent on co-financing
of the bigger loans of Byblos Bank Armenia.

Stepanyan says that the bank is expecting to receive the synthetic
loan in one tranche in May. "This is a very important experience for
Armenia. In the future it can be used for SME crediting." The money
will be provided at agreed on, fixed USD/AMD exchange rate. This will
help to reduce the currency risk, to prolong the period of lending
in AMD and to enlarge the AMD credit portfolio.

To remind, in early autumn 2007 100% of the shares of ITB were bought
by Byblos Bank SAL. As a result, the bank was renamed into Byblos
Bank Armenia. For the moment, Byblos Bank SAL holds a 65% stake in
the bank with 25% belonging to EBRD and 10% – to OFID.

TCX Investment Management Company, headquartered in Amsterdam, is
a special purpose fund providing market risk management products to
investors active in emerging markets. It focuses on currencies and
maturiries which are not covered by regular market providers.