Cafesjian Family Foundation and Cascade Capital Holdings CJSC AIPRG Tsakedzor 29 th May th May 2005

Cafesjian Family Foundation A United States non-profit, tax exempt, 501(c)3 organization A United States non-profit, tax exempt, 501(c)3 organization Significant financial resources Significant financial resources Leading investor and donor in Armenia Leading investor and donor in Armenia Mission Promote the well being of Armenians Promote the well being of Armenians Foster economic development and western-oriented values in Armenia Foster economic development and western-oriented values in Armenia.

Cafesjian Family Foundation Program Investments Armenian Genocide Museum in Washington D.C., USA Armenian Genocide Museum in Washington D.C., USA Gerard L. Cafesjian Museum of Modern Art in Yerevan, Armenia Gerard L. Cafesjian Museum of Modern Art in Yerevan, Armenia CS Media Group: Armenia TV, Supersystems CS Media Group: Armenia TV, Supersystems Renewable Energy: H2Economy, Hydro, Wind, Solar Renewable Energy: H2Economy, Hydro, Wind, Solar Financial Sector: Cascade Capital Holdings and Affiliates Financial Sector: Cascade Capital Holdings and Affiliates

Cafesjian Family Foundation Grant Recipients include: American University of Armenia Armenian General Benevolent Union Armenian Assembly of America Armenia Tree Project Orran Benevolent NGO Armenia Fund

Established in 2004 Create and manage commercial financial companies Create and manage commercial financial companies Facilitate investment into Armenia and the Caucasus Facilitate investment into Armenia and the Caucasus Improve trust, service and innovation across the sector Improve trust, service and innovation across the sector Introduce a comprehensive, integrated product range Introduce a comprehensive, integrated product range Become a regional financial market leader Become a regional financial market leader CCH logo

Cascade Investments: Private and corporate wealth management; Cascade Investments: Private and corporate wealth management; Asset and Fund management; strong portfolio of investment opportunities, including access to western markets. Cascade Credit: supporting Armenian exports and import substitution, through trade finance, leasing and factoring. Cascade Credit: supporting Armenian exports and import substitution, through trade finance, leasing and factoring. Cascade Insurance: Offers comprehensive Life and Non Life coverage to retail and corporate clients. The first domestic reinsurer in Armenia Cascade Insurance: Offers comprehensive Life and Non Life coverage to retail and corporate clients. The first domestic reinsurer in Armenia Cascade Bank: Development of a full service retail and corporate Bank Cascade Bank: Development of a full service retail and corporate Bank Positions Cascade Capital as a fully integrated financial one stop shop

USAID : Technical Assistance to Cascade Credit DCA : United States Treasury guarantee for debt securities EBRD : Equity share in Cascade Insurance Equity share in Cascade Bank? World Bank / EBRD / CFF: Partners in alternative energy World Bank / CFF: Partners in EIF International Financial Institutions CCH logo

Growth in past three years Repossession under Civil Code and Bankruptcy Law More lenders Improved risk assessment GTB 1999: 65%, 2005: 5% Therefore lenders need to lend to the private sector. Mortgages

Market profile: Distorted by high end focus and vertical spikes. Artificial pressure to maintain inflated prices. High end more vulnerable to housing market fluctuation Mortgages

Target horizontal portfolio spread. Emerging domestic middle class Improves risk Quantitative and Qualitative Greater portfolio spread = better stats = better risk assessment. Yerevan and the regions Mortgages

Client base: Job security and provable (legal) income; Family income $1000 / month More start up businesses More domestic companies prepared to invest in quality Increasing management awareness and sophistication Mortgages

Value: $600 m2 x m2 apartments Loan $30k Loan 70% of value Period: 7 years Annual rate: 14% (US$), 15% (AMD) Mortgage Profile

Cascade and mortgage backed securities Start with DCA then introduce MBS-in series or parallel Virtuous circle: Lend, securitize portfolio, recycle funds and re-lend. Mortgages

Target: Extend period and reduce cost With more IFI loc and guarantees, we could go 15 years. Securitize at 3% + reduce mortgage rate to 5% for 20 years. Encourage professional approach Trade Associations-encourage thresholds and self regulation Future steps

Improve legal environment for easier repossession Loan agreement accepted as collateral Loan register agency Enlightened regulation Electronic e-governance for Cadastre Improved notary service Future steps

Validate electronic exchange; move away from paper and seals Securitization (MBS); requires a standard lending product Issue Civil Code friendly bonds Introduce Title insurance Future steps

Cutting edge, innovation. Regional leader