Debut Issuance of Depositary Notes in Georgia

Monday, 30 November 2020


JSC Georgian Stock Exchange (“GSE”) and its subsidiary JSC Georgian Central Securities Depository  (“GCSD”) announced today that the GCSD has launched debut Georgian Depositary Notes (GeDNs) of JSC  Silknet (“Silknet”), a leading Georgian telecommunications operator, linked to USD 200 million, 5-year  11% senior unsecured bonds listed on the Global Exchange Market of Euronext Dublin (“the Notes”). 

The GeDN program is a debut depositary instrument issued in Georgia enabling investors to take indirect  exposure to Silknet’s Notes. The GeDN prospectus was approved by the National Bank of Georgia and the  GeDNs have been listed on the Georgian Stock Exchange. The terms and conditions of the GeDNs mostly  match those of the Notes. 

The GeDNs can be converted to the Notes and vice versa by investors through Georgian brokers. Silknet  acts as the issuer and the program sponsor, while the GCSD acts as the GeDN depositary. Notes converted  to GeDNs are kept at the local custodian in the GCSD’s name. 

The USD 200,000 minimum denomination of the Notes as well as lack of access to foreign brokers and  custodians effectively prevents many Georgian investors from directly investing in Eurobonds. Hence, the  GeDNs’ USD 1,000 denomination and the local listing ensures that local retail and institutional investors  are now able to indirectly invest in the Notes through Georgian brokers. 

Chief Executive Officer of the Georgian Stock Exchange and Chairman of the Georgian Central Securities  Depository, George Paresishvili stated: “We listed Silknet’s Notes on the GSE back in July 2019, which  was the second case of a dual listing on the local market, when a security can be traded both domestically  and internationally. Now we welcome Silknet’s GeDNs to the GSE in another landmark transaction for  Georgia. For the first time we enabled domestic and non-resident investors simultaneously trade both the  GeDNs and their underlying Notes on our exchange, which should increase local demand and liquidity for  Silknet’s Notes. The new instrument will contribute to the further development of the capital market in  Georgia. We hope that other Georgian companies which have already issued their securities  internationally, will follow suit”.