DUSHANBE, AUG. 30 2017 (The Conway Bulletin) — Brushing aside a worsening banking crisis, Tajikistan said that it was going to launch its first ever sovereign bond .
Commentators said that the Eurobond could be issued at the start of September and have a lifespan of around nine years, although they did not give a coupon value. The cash raised in the Eurobond would go towards funding the construction of the Rogun Dam, one of the biggest hydropower projects in the world.
It will also make Tajikistan the second country in Central Asia, after Kazakhstan, to issue sovereign debt, giving Western investors increased exposure to the region.
Media later said that Tajikistan was aiming to raise $500m through the Eurobond that was likely to have a coupon of around 7.625%.
Shortly after the announcement, ratings agency Moodys, which has Tajikistan at the “highly speculative” investment grade of B3, warned potential investors of the risks involved in a Tajik investment. It said that Tajikistan’s banks were under increased pressure.
“The issuer rating also incorporates the credit challenges posed by institutions that are weak on a global scale, although progress on financial reforms and macroeconomic stability indicate some improvements,” it said.
Over the past 15 months, the Tajik government has rolled out a bailout plan to stop banks from going bankrupt.
The Central Asia region has been recovering from a prolonged economic downturn linked to a recession in Russia and a collapse in oil prices from mid-2014.
ENDS
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(News report from Issue No. 342, published on Sept. 7 2017)