EBRD concluded first repo transaction with Armswissbank, providing 2.3 bln AMD for Armenian Eurobonds

ArmInfo. The European Bank for  Reconstruction and Development (EBRD) concluded the first reverse  repurchase agreement with one of Armenia's leading banks -  Armswissbank, providing 2.3 billion AMD to secure Armenian USD  government bonds. The deal was concluded within the framework of the  Global Main Repo Agreement (GMRA) signed between the participants in  January 2018, which gives the parties the opportunity to enter into  joint repo deals.

According to the source, Armswissbank raised funds from the European  Bank in USD with a maturity of 1 year. Frontclear, the leading and  specializing in the development of the money market guarantee the  transaction. This is also the first transaction under the guarantee  of Frontclear in Armenia.

"The implementation of the reverse repo transaction is an important  part of the EBRD's work on developing the capital market and the  Armenian dram. Deployment of activities in the repo market in dram  terms has given a great impetus to the authorities and foreign  investors. Thus, EBRD, in addition to providing technical assistance  for the development of the local money market, also acts as its  participant," the Bank's official statement reads.

This transaction became possible with the assistance of the Central  Bank of Armenia, which ensured the introduction of a legal framework  for derivative instruments (derivatives). The EBRD Technical  Assistance Funds supported this reform. The corresponding amendments  to the Law on the Securities Market were adopted by the Parliament of  Armenia in late 2016, and they are included in the law taking into  account the requirements and standards of the International Swaps and  Derivatives Association (ISDA).

Frontclear is a financial markets development company focused on  catalyzing stable and inclusive interbank markets in emerging and  frontier markets. Frontclear facilitates access to financial markets  for local institutions to local and global markets through the  provision of credit guarantees to cover their counterparty credit  risk. Frontclear provides Basel III compliant first demand  irrevocable guarantees.  Our guarantees are in turn  counter-guaranteed by KfW, a AAA-rated financial institution.

"Armswissbank" CJSC established on October 7, 2004 is the leading  Armenian bank providing underwriter, market maker services, and  depository services. The Bank is an active participant in the primary  and secondary securities markets. Since 2006, Armswissbank acts as an  agent of the government in the primary market of state bonds. The  holder of 80% of Armswissbank is HVS Holding LLC, managed by Vardan  Sirmakes and registered in Luxembourg, and the company  BELEGINGSMACHEPIJ JONGO LLC, registered in the Netherlands,  controlled by Vardan Sirmakes, owns the remaining 20%.