The EBRD invested RON 125 million (EUR 26 million equivalent) in the inaugural senior non-preferred bonds issued by Banca Comerciala Romana ("BCR"), as part of a total issuance of RON 600 million.
This is the first senior non-preferred bond issuance by a bank in Romania and EBRD's countries of operation, following the implementation of the EU Bank Recovery and Resolution Directive, designed to make banking systems more robust. This would allow the bonds to qualify for minimum requirements for own funds and eligible liabilities (MREL), to be set by the National Bank of Romania for BCR.
The bonds have a 7-year maturity and will be listed on the Bucharest Stock Exchange.
With this investment, the EBRD is seeking to support the resilience and regulatory compliance of the second largest bank in Romania, as well as contribute to the capital market development of the country.
The senior non-preferred bonds will facilitate BCR's compliance with MREL requirements, will support the diversification of the bank's funding base providers and will add to BCR's resilience to market or regulatory shocks, ultimately increasing its long-term sustainability.
EBRD's participation contributed to the mobilization of local institutional investors and supported BCR in successfully placing the bond.
The project will support the Resilient transition quality by contributing to the regulatory compliance of a systemic financial institution in Romania and supporting its MREL-eligible funding base, and by supporting local capital market development. The project will also support the Well-governed transition quality by participation in the issuance of innovative capital market instruments in Romania.
Moreover, the project is supporting the Bank's Green Economy Transition ("GET") approach in Romania via BCR, allocating the EBRD funds towards funding certified commercial projects and residential projects, as well as renewable energy projects, which meet the GET eligibility criteria.
BANCA COMERCIALA ROMANA SA
BCR is the second largest bank in Romania by total assets, with 15% market share as of end-2018. In 2018, BCR reported total assets of EUR 15.4 billion. BCR is 99.88% owned by Erste Group Bank. It is rated Baa3/stable by Moody's and BBB+/stable by Fitch. The senior non-preferred bond issuance placed by BCR is rated BBB+ by Fitch.
EBRD's participation as a stable key investor will provide comfort to other market players, facilitate mobilisation of the institutional investor base, support placement of an innovative instrument and contribute to capital market development in Romania. In addition, the project will represent a strong signal of the viability of local capital markets for raising MREL-eligible funding instruments.
Environmental and Social Summary
Category FI (2014 ESP). The Framework Agreement covering the bond issuances will require the client to maintain compliance with PRs 2, 4 and 9, and ensure that any Sub-projects utilising the proceeds of Bank investment, and being noted as a GET component, shall meet the Bank's GET criteria.
Technical Cooperation and Grant Financing
Company Contact Information
Bucharest, 15th Calea Victoriei, 3rd District, Postal Code 030023
PSD last updated
18 Dec 2019
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More information on the EBRD’s practices in this regard is set out in the ESP.
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Independent Project Accountability Mechanism (IPAM)
If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).
IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.
Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM via email firstname.lastname@example.org to get guidance and more information on IPAM and how to submit a request.