Banca Comerciala Romana - Senior non-preferred bonds(f)

Location:

Romania

Project number:

51399

Business sector:

Financial institutions

Notice type:

Private

Environmental category:

FI

Approval date:

27 Nov 2019

Status:

Signed

PSD disclosed:

18 Dec 2019

As permitted by paragraph 2.6 of Section III of the Access to Information Policy, disclosure of this PSD was deferred in accordance with paragraph 1.4.4 of the Directive on Access to Information.

Project Description

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.

Project Objectives

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.

Transition Impact

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.

Client Information

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.

Additionality

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

None.

Company Contact Information

nullhttps://www.bcr.ro/en/contact
Bucharest, 15th Calea Victoriei, 3rd District, Postal Code 030023

Implementation summary

None.

PSD last updated

18 Dec 2019

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”.  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and Compliance

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD Enquiries form.

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 ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.

 

Share this page: