The Capital Market Support Program

Brief description of the program:

The Capital Market Support Program includes Co-financing Component which contains the co-financing of the following two types of expenses related to the issuance of bonds:

1. The cost of obtaining a credit rating paid/payable by the beneficiary to the rating company.

2. Service fee (commission)   payable by the beneficiary to the brokerage company.

Who can participate in the program:

Two types of beneficiaries can participate in the program:

Category A Beneficiary- Enterprises, whose annual turnover does not exceed GEL 60 million;

For additional criteria, please refer to the Decree of the Government of Georgia, provided in the attached files.

Category B Beneficiary – Enterprises, with an annual turnover of more than GEL 60 million and/or operating in the finance sector.

For additional criteria, please refer to The legal act of the director,  provided in the attached files.

The main conditions of the program:

• Within the framework of the program, co- financing of the costs related to the placement of debt securities will be carried out only for placements that are public offering;
• Beneficiary is entitled to place securities   in national (GEL) and foreign (USD/EUR/GBP) currencies within the framework of the program;
• Within the framework of the program, co-financing of costs related to the placement within the preliminary prospectus submitted to the National Bank of Georgia before the beneficiary's inclusion in the program will not be implemented;
• Within the framework of the program for each OP, It is allowed to prepare only one Prospectus for emission;
• The Brokerage Company must submit a prospectus approved by the National Bank of Georgia within 6 months from the beneficiary's inclusion in the program;
• For the co-financing of the cost(s) of this program, the Brokerage Company and/or the Beneficiary, must apply to the Agency within 18 months after the Beneficiary's inclusion in the program, in accordance with the established rule.

Prohibited activities and emission purpose within the program.

Please see the attached file (Annex)

Documentation to be provided within the program:

To participate in the program, the interested company must submit the application form to the Agency “Enterprise Georgia” at the following email address

cms@enterprise.gov.ge

Attached files:

The Decree of the Government of Georgia

The legal act of the director (Incentivizing the Issuance and Placement of Bonds within the frame of USAID Financial Innovation Program)

Application form for participation in the program:

Application form

1. The program consists of two components: The cost of obtaining a credit rating paid/payable to the rating company, the maximum amount of which is 100,000 GEL. When calculating the co-financing  volume, the  total  income accumulated during the previous economic year of the beneficiary shall be taken into account:

• 80% of expenses will be reimbursed in case  of income up to GEL 20 mln;
• 70% of expenses will be reimbursed in case  of income from GEL  20 mln to GEL 40 mln;
• 60% of expenses will be reimbursed in case  of income from GEL  40 mln to GEL 60 mln.

2. Service   fee   (commission)   payable   by  the beneficiary to the brokerage company - the maximum amount of which is GEL 200 000. When calculating the co-financing of the service fee (commission), both the volume of issued securities (issuance) and the total income accumulated during the previous economic year of the Beneficiary shall be taken into account, as specified in the table below:

For one Beneficiary, within the framework of more than one OPs, the maximum amount of co-financing within the program in  total  is  limited  to 1 million GEL. The co-financing of category A beneficiaries will be carried out by the Enterprise Georgia. Within the co-financing component of the program (success fee), the partner of the Agency is the USAID Financial Innovation Program.

For Category B Bond Placement, the success fees will be financed solely by the USAID Financial Innovation Program funds, with the Agency’s coordination.

The Palladium (as implementer of the USAID Financial Innovation Program) will finance the success fee of 1% of the Bond placement, not exceeding 150,000 GEL. In case the Bond placement requires an SPO, the Palladium will provide additional financing of 50,000 GEL. The total payment by the Palladium for the Bond placement requiring SPO shall not exceed 200,000 GEL.

The USAID Financial Innovation Program will allocate the total budget of 1,000,000 GEL for Category B. Allocation is on a first-come, first-served basis.

For detailed information on Category B beneficiaries, please refer to the legal act of the director.