NOA Issues Long-Term Bonds to Domestic Institutional Investors

NOA sh.a., licensed by the Bank of Albania as a non-bank financial institution, issued long-term corporate bonds on March 1, 2017, thus introducing an innovative product in terms of the capital market in Albania.

This product was realized after a long and constructive cooperation with serious and consolidated financial institutions in the domestic market, seeking to diversify their portfolio in the investment market, as well as under the positive and cooperative spirit of the Financial Supervisory Authority (FSA).

How long has your company been in the market and what does bond issuance represent at this stage of business development?

NOA company has been operating in the market for more than 18 years, and through 23 branches and about 300 employees has financed families and small businesses to develop their activities and improve their standard of living. The introduction of bonds in the market follows the initiatives taken by the company five years ago, when it decided to bring a new business model, which aimed to improve customer service and provide quick solutions in accordance with their needs. To finalize this remodeling, NOA has made a series of investments, mainly in information systems, being, among other things, the first company in the financial market in Albania that has fully automated the lending process.

Why was it necessary to issue bonds in the domestic market?

Being a non-bank financial institution, NOA does not collect deposits from clients. Under these conditions, to carry out the lending activity, the company is financed by international financial institutions as well as local banks, constantly taking care of maintaining a diversified investment portfolio and sufficient capital to support further portfolio growth.

The purpose of the issuance of bonds by NOA is the increase of funds in local currency and the gradual reduction of funds in foreign currency by institutional investors operating in Albania, improving the management of funds. Currently, the loan portfolio is mainly in ALL, due to the very nature of microcredit financing, but also to protect the client from exchange rate risk. The Euro/ALL investment ratio is at almost equal levels, because a large part of the funds coming from international financial institutions are provided in local currency. Also, the issuance of bonds was developed as the company's ambition to mark the Albanian market through innovative products in the capital market.

What are the features of bonds issued by NOA and to whom are they addressed?

On March 1st of this year the company issued 160 bonds, with a nominal value of ALL 500 thousand, with a 3-year term and an interest rate of 7.00%, fixed throughout the maturity period. They are issued to local financial institutions, such as second level banks and insurance companies.

The funds from the issued bond will be used to finance the main activity of the company which is lending. The bonds are transferable to other institutional investors and their holders must ensure that the transfer is carried out in accordance with applicable laws and regulations (Civil Code and Law on Securities). Potential investors should conduct risk factors assessment through their professional and independent advisors and determine the suitability of the investment.

Are further bond issues planned?

Based on the successful realization of the issue, which was signed to the extent of 100%, and the interest expressed by other parties to participate in the issuance of other NOA bonds, we are committed to continue expanding the financing of the activity, through these instruments, in accordance with the regulations and legislation in force.

How can stakeholders be informed about your company bonds?

NOA will periodically publish information about bonds on the official website www.noa.com.al, where you can also find general information about the company, its scope, organization, products and services.