The European Bank for Reconstruction and Development (EBRD) agreed a $10m financing facility to Byblos Bank Armenia to support private businesses across the country.
The financing package includes two elements:
- a synthetic loan in Armenian Dram (AMD) for an amount equivalent to up to $5m, which will be used to finance investments and working capital needs of local businesses,
- a $5m loan to co-finance Byblos Bank Armenia’s larger sub-loans.
Under the synthetic loan structure, the EBRD is providing the financing in US dollars at a pre-determined fixed USD/AMD exchange rate. Byblos Bank Armenia’s loan obligation is therefore the AMD counter-value of the provided funds.
The synthetic local currency loan will help Byblos Bank Armenia reduce its foreign exchange risk, increase the term of its local currency funding, and expand its portfolio of loans in local currency.