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EBRD and Amundi-Acba Asset Management collaborate on cross-currency repo transaction
16 January 2024, Yerevan. EBRD and Amundi-Acba Asset Management have
executed the first cross-currency repo transaction.
- The EBRD and Amundi-Acba
continue close collaboration with a landmark transaction
- Cross-Currency Repo
transaction supports local currency denominated loans to private sector
- This innovative transaction improves
the efficiency of managing pension funds and strengthens development of
capital markets in Armenia
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.
In this innovative move, the EBRD
and Amundi-Acba have executed the first cross-currency repo transaction,
setting a new boundary for secure and strategic financial transactions in
Armenia.
In this landmark transaction, the
EBRD pledged hard currency denominated high-quality liquid assets, receiving
local currency funds in return. This cross-currency repo agreement serves as a
secure avenue for Amundi-Acba to deploy the pension funds’ assets, aligning
with their commitment to prudent financial management.
For EBRD, the transaction secures
long-term Armenian dram (AMD) funds at onshore market rates, contributing to
the strengthening and diversifying of its funding sources. The transaction was
executed under Global Master Repurchase Agreement (GMRA) which was signed
between two entities as of 21 June 2023.
The economic impact is
significant, as EBRD is dedicated to maximizing the transaction's effect. The
proceeds will be strategically reinvested into the real economy, creating a
positive transition impact, and contributing to sustainable development goals.
"EBRD continues investing in local market’s financial capacity and
know-how by employing simple, yet innovative products in its portfolio
management. Cross-Currency Repos will be an additional tool in arsenal to
expand and fortify our funding base in AMD." Said Gursu Keles, EBRD
Associate Director, Senior Trader.
"This is another innovation we are introducing during our fund
management activity, which enables Amundi-Acba to deploy the pension funds’
assets more effectively and contributing to the local capital market
development", said Hrayr Aslanyan, Deputy CEO, Fund manager at
Amundi-Acba.
Amundi-Acba Asset Management manages 3 mandatory pension
funds in Armenia, with assets under management surpassing 400 billion AMD (900
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.
This is the second time EBRD engages with Amundi-Acba Asset Management
in Armenia. 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. This innovative
transaction ty secures reliable access to domestic currency liquidity while
eliminating the foreign currency risks for local borrowers.
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, the Bank has invested over €2
billion in 210 projects in its financial, corporate, infrastructure and energy
sectors, with 91 per cent of investments in the private sector․
