Thanks to its growing reputation as one of the most business-friendly countries in the former USSR, the Republic of Georgia has established a strong investor following with its first ever Eurobond. Lead managers JPMorgan and UBS reported that the $500 million five-year maiden issue in April was more than three times oversubscribed, enabling them to price it at the tight end of the 7.5% to 7.75% range.
"The deal had real scarcity value and a benchmark status debut which provided a strong incentive for investors to participate," says Stefan Weiler, executive director at JPMorgan in London. He adds that as the first sovereign bond from the Caucasus region the issue was a welcome diversification play and at $500 million it is also eligible for inclusion in the widely followed JPMorgan EMBI emerging market bond indices.
A real hit
Igor Hordiyevych, managing director at UBS in London, says that the Georgian delegation headed by prime minister Lado Gurgenidze proved a real hit with investors, achieving a near 100% order conversion rate from their one-on-one meetings with potential buyers in Europe. Weiler says that the Georgian government used the roadshow as an opportunity to highlight the successful economic reforms of the past four years and also to allay investor concerns about the country’s relations with Russia and the two separatist regions of South Ossetia and Abkhazia.