Encouragement Bank issued an unsecured corporate bond emission with a nominal value of BGN 5 million. The resources will be utilized in support of the Bank’s operations for financing of small and medium enterprises.
The manager of the issue is the investment intermediary Eurofinance. The initial subscription of the bonds has been performed under private placement. The bond issue has a maturity of 2 years and an annual interest rate of 4.75%, with interest payments on a quarterly basis.
This is the first bond emission issued by Encouragement Bank AD, which is to be transformed into a Development Bank. Mr. Angel Gekov, executive director of the bank, commented that the characteristics of the emission are subject to the fact that this is a new instrument for Encouragement Bank, through which it will finance its operations. According to him, in regard of the specific activities to be performed by the Development Bank, similar types of financial instruments will be used even more in the future, looking towards placement at the international financial markets as well.
Encouragement Bank concluded the third quarter of 2007 with a net profit of BGN 7 million and an increase of the total amount of the assets with more than 70%.
