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%.
