EBRD and Amundi ACBA Asset Management sign derivatives master agreement

YEREVAN, December 3, /ARKA/. The European Bank for Reconstruction and Development (EBRD) and Amundi-ACBA Asset Management  are joining forces to facilitate access to local currency funding and strengthen the local capital market in Armenia.

The parties signed a 2002 ISDA® Master Agreement, published by the International Swaps and Derivatives Association (ISDA®), including a 1995 Credit Support Annex thereto which allows them to engage in over the counter currency swap transactions in the future. The 2002 ISDA® Master Agreement serves as a framework setting out the legal and credit terms for the parties that apply to all derivatives transactions that those parties will enter into in the future. The1995 Credit Support Annex sets out the terms of the collateralisation of such derivatives transactions between the same parties.

The currency swaps will enable Amundi ACBA to hedge its funds against currency risk whilst making long-term hard currency denominated investments abroad, and provide the EBRD with further access to on-shore local currency funding in Armenian Dram for on-lending to its clients.

Amundi-ACBA Asset Management manages 3 mandatory pension funds in Armenia, with assets under management surpassing 233 billion AMD (433 million EUR). Owned by Amundi, the leading European asset manager and ACBA Bank, one of the leading banks in Armenia, the company has extensive expertise in fund management.

The agreement is part of the EBRD’s efforts to step up its drive to source local currency lending and further develop the capital markets in Armenia. The swap facility secures reliable access to domestic currency liquidity while eliminating the foreign currency risks for local borrowers.

This is the first time EBRD engages with an asset management company in Armenia and it is the first time EBRD enters into an ISDA® Master Agreement in Armenia. Working with domestic counterparties the markets puts the EBRD in a strong position to work with domestic counterparties to address their key issues.

The EBRD is the leading institutional investor in Armenia, active in all sectors of the economy. Since the start of its operations in the country in 1992, the Bank has invested €1.7 billion in 195 projects in its financial, corporate, infrastructure and energy sectors, with 91 per cent of investments in the private sector. -0-

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