AGB Subdebt

completed

_x000C_The proposed transaction consists of a subordinated loan of up to $15.0 million to Azerigazbank Open Joint-Stock Company (AGB or the Bank). The proposed loan will qualify as Tier II capital. The investment is intended to support the Bank’s growth in retail and SME segments by expanding its capital base and lengthening the maturity of its liabilities. The proposed project is a follow-on transaction which builds on IFC’s existing long-term relationship with AGB. IFC provided three senior loans to AGB for funding the Bank’s SME lending and leasing operations in 1998, 2003 and 2006. Also, in June 2006, IFC acquired a 17.5% stake in AGB’s capital. The debt and equity investments are coupled by an ongoing advisory service program intended to strengthen AGB’s institutional capacity and to improve the Bank’s operations in key areas. The Bank also participated in IFC’s Corporate Governance Pilot Project in Azerbaijan. By providing multifaceted support through investments and advisory service, IFC is supporting AGB to grow as a key market player in Azerbaijan.