Baku, FinanceTime. Frontclear, Financial Markets Development Company and TCX Financial Initiative Fund, whose shareholders are several European financial institutions, have signed the first non-deliverable forward (NDF) agreement in the Azerbaijani banking sector with Unibank.
The deal will enable Unibank to insure its customers’ currency risks and expand corporate clients' access to long-term financial resources.
The agreement will be documented in accordance with the terms of the Master Agreement of the International Swap and Derivatives Association (ISDA).
Chairman of the Management Board of Unibank CB Faig Huseynov stressed that the partnership with the prestigious financial institutions like Frontclear and the TCX will create new opportunities for the bank's customers: “We are very pleased that the NDF transaction will open up new opportunities for financing local business, which is one of the important targets in Unibank's strategy. This agreement will provide more opportunities to provide our corporate clients with profitable and less-risky financial resources. Thus, Unibank will further be able to increase its support for the development of the real sector.”
Senior Vice President of Frontclear Andrei Shinkevich commented on the agreement: “We are proud to execute our first transaction in Azerbaijan and the key role we have played in originating the structure that allowed the Azerbaijani bank to access the off-shore NDF market. The transaction strengthens global markets players’ ability to mitigate legal risks in the country and sets a benchmark for the development of Azerbaijan’s money markets going forward.”
Jerome Pirouz, Senior Vice President at TCX Financial Fund, expressed his satisfaction with the institution represented in this agreement: “As Frontclear has diligently covered the credit & legal risk aspects it opens avenues for TCX to venture into direct relationships with more comfort in the future to service the long term relationship of the Fund.”
Frontclear is a development finance company with offices in The Netherlands, and dedicated to stable and inclusive money markets. Its investors are largely European development financial institutions and governments. Frontclear has unlocked access to global and local interbank markets for EMDC banks by providing credit guarantees to cover counterparty credit risk, on the condition that local currency assets can be used for collateral management purposes. Complementarily, Frontclear offers technical assistance and implements regulator roundtables, advisory projects on legal enforceability, industry training and market infrastructure development – all targeting the development of a healthy money markets. To-date, Frontclear has facilitated USD 980 million in interbank money market transaction in 13 countries. It has trained over 900 obligors and regulators in over 13 countries and signed a near dozen partnerships with central banks and local beneficiaries.
Unibank CB OJSC has been operating since 1992. It is one of the largest private banks in Azerbaijan. EBRD, one of the largest financial institutions in the world, is one of the main shareholders of Unibank. The bank has a wide network of services in the capital and regions. At present, Unibank serves more than 1 million individual and corporate clients. For more than 27 years, Unibank has been awarded numerous awards by international and local organizations for his successful commercial activities and participation in social projects.
TCX is a global development finance initiative which offers long term currency swaps and forwards in 80+ financial markets where such products are not available or poorly accessible. The Fund started operations in 2007 and has since then provided hedging instruments with a total volume of USD 6.5 billion, spread over 3000 transactions. Today the fund has a total exposure of over USD 4 billion on 60 frontier market currencies. By ‘selling’ this exposure it creates markets and gives frontier countries access to the international capital market.