Ameriabank's new achievements. Raising up to $20 million in financing from Fitch's B+ rating with a stable outlook - News | Ameriabank
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16May

Ameriabank's new achievements. Raising up to $20 million in financing from Fitch's B+ rating with a stable outlook

16 May, 2016 | Press release, All | Return|

"Ameriabank" CJSC and DEG (Deutsche Investitions-und Entwicklungsgesellschaft mbH) signed a $20 million loan agreement with a 6-year repayment period in London on May 12. The loan will be directed to the financing of small and medium-sized enterprises in the Republic of Armenia.

The contract was signed by Artak Hanesyan, CEO of Ameriabank, Director of Financial Institutions of DEG Europe and Asia Rena Terfract and Senior Investment Manager of Financial Institutions of Europe and Asia Julian Locke.
DEG is a member of KfW Bankengruppe (KfW Banking Group). It finances investments by private companies in developing and transition countries. As one of Europe's largest development finance organizations, DEG encourages investment by private business entities in sustainable economic growth and improved living standards.

"As you can see, Armenia is still attractive for foreign partners and investors. The main goal of this partnership is the development of small and medium-sized enterprises, which remains one of our most important, strategic directions. We are working to increase the volume of investments," Ameriabank's financial director Gevorg Tarumyan said at the meeting with journalists.
Ameriabank-DEG cooperation started back in 2009, when a credit line agreement was signed with this organization and the Netherlands Development Finance Company (FMO). Later, the competition turned into a strategic partnership, when in 2012 A loan agreement of 20 million US dollars was signed in November. This cooperation is in line with the Bank's strategy, according to which the financing of small and medium-sized businesses is one of the primary directions of the Bank's credit policy.

Tarumyan, listing the recent achievements and successes of Ameriabank, also spoke about the "Deal of the Year - Energy Efficiency" award, which was awarded to the bank by the European Bank for Reconstruction and Development (EBRD) in 2015 for improving the energy efficiency of the greenhouse infrastructure in Armenia.
Ameriabank has issued two letters of credit for "Alternative Energy" LLC, which were approved and financed by Komertsbank under the guarantee of EBRD.
Tarumyan informed that the Development Bank of the Netherlands (FMO) also participated in the transaction, covering a certain part of the political and payment risks. The total cost of the project was $2.3 million, of which $1.91 million was financed through letters of credit issued by Ameriabank.
The director of finance noted that thanks to the received financing, the company "Alternative Energy" purchased high-quality energy-saving equipment from the Czech Republic, which provides an opportunity to save $390,000 in energy per year compared to greenhouse companies using conventional equipment, as well as to reduce the use of natural gas by 1,950,000 in the amount of m³.
According to him, thanks to the use of modern high-quality equipment, the company gets the opportunity to gain competitive advantages both in local and foreign markets.


Answering PanARMENIAN.Net's question whether loans for greenhouse farms are provided on preferential terms, Tarumyan emphasized that the crediting of greenhouse farms proceeds in 2 stages.
"At the first stage, we issue a letter of credit, which is on much more favorable terms than a loan. In the second stage is the loan, the terms of which depend on creditworthiness, terms, etc., but we try to provide relatively affordable terms. If we compare, the loans we provide are very competitive in terms of terms and interest rates," explained the financial director.
He also emphasized that greenhouse farms are also a strategic direction, the programs with the involvement of the bank provide an opportunity to make agriculture independent of weather conditions.
"In addition, we have financed large economies so that they can export outside of Armenia," Tarumyan noted.

Emphasizing the role of greenhouse farms for the development of Armenia's agriculture, Ameriabank actively supports the financing of greenhouse farms, particularly for the import of equipment that ensures energy efficiency and high productivity. More than 70% of greenhouse projects in Armenia are financed by Ameriabank.
Thanks to the use of energy-saving and the latest technological equipment, greenhouse farms have the opportunity to gain competitive advantages, ensure uninterrupted production throughout the year and make a significant contribution to the development of Armenia's economy.
Another success of Ameriabank is that Ameriabank has been given a "B plus" rating with a stable outlook by the Fitch rating agency. Thus, the prestigious international rating organization reaffirmed the "B plus" rating of the issuer of long-term obligations in foreign currency awarded to Ameriabank, setting a stable outlook instead of the negative outlook (Long-term Issuer Default Rating (IDR)) granted a year ago.
Reaffirmation of such a rating speaks of the Bank's acceptable financial indicators, significant liquidity reserves, manageable refinancing risks and high reputation. Fitch highlighted the fact that, despite the high competition in the RA banking system, Ameriabank has taken a firm position in the market, maintaining its leading position in the lending sector (market share: 14.8%), trade financing, obligations to customers (market share: 15%).

Tarumyan noted that by reviewing the rating outlook, Fitch expects that Ameriabank will maintain its stable position, resisting the pressures of the difficult external environment. According to him, this will enable the bank to strengthen its stable positions.
In addition, the bank also has a sufficient level of profitability and a significant capital reserve due to the $30 million funds raised from the EBRD in December 2015.
Obtaining a "B plus" rating with a stable outlook by Fitch will contribute to increasing the recognition of Ameriabank in the international arena and the level of trust in the Bank, and the expansion of partnership relations with foreign investors in Armenia.

Source: PanARMENIAN.Net