Tag Archives: sovereign debt

IFC and ADB issue lari-denominated bonds

FEB. 25 2015 (The Conway Bulletin) — Two major inter-governmental financial organisations — the Asian Development Bank and the International Finance Corporation (IFC) — have issued lari-denominated bonds for the first time.

The IFC, which is part of the World Bank, issued a 30m lari ($13.2m) bond with an initial yield of 6.924% and the Asian Development Bank issued a 100m lari ($44.2m) bond with a floating yield.

The idea behind the issues is to help boost the Georgian capital markets and to support small businesses.

In a statement, Pierre Van Peteghem, treasury of the Asian Development Bank said: “This bond — the largest by a foreign issuer — will provide a key market benchmark and could encourage more borrowers, both domestic and foreign, to tap the Georgian bond market.”

The ADB explained that profit from the bonds would be given to TBC Bank to lend out to small and medium sized enterprises.

And they need all the help they can get at the moment.

Like its neighbours in the South Caucasus, Georgia is struggling to deal with the fallout from the economic turbulence in Russia. Its lari currency is losing value, making lari-denominated bonds a risky investment.

Still, the drive by the IFC and the ADB to sell lari denominated bonds is a boost for the ailing currency. It also shows confidence in its future. It remains to be seen if the market also holds the same confidence in the lari currency.
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Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 220, published on Feb. 25 2015)

Azerbaijan’s ratings downgraded

JAN. 30 2015 (The Conway Bulletin) — The ratings agency Standard & Poor’s downgraded Azerbaijan’s debt rating to negative from stable because of the fall in oil prices. It said 44% of Azerbaijan’s GDP and 95% of its exports were linked to the energy industry. Despite calls from various foreign institutions, Azerbaijan has failed to diversify.
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(News report from Issue No. 217, published on Feb. 4 2015)

Armenia plans Eurobond issue

FEB. 2 2015 (The Conway Bulletin) — Armenia’s finance ministry said it planned to issue Eurobonds later this year to help it through a tough economic period. A sharp fall in the Russian rouble has hit Armenia with analysts warning of a recession. The finance ministry did not specify the type of Eurobond it was considering issuing.
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(News report from Issue No. 217, published on Feb. 4 2015)

Kazakhstan likely to issue Islamic debt

OCT. 28 2014 (The Conway Bulletin) – Kazakhstan will probably issue another sovereign or quasi- sovereign bond next year following its $2.5b Eurobond issue in October, the head of the Kazakh Central Bank Kairat Kelimbetov told Reuters in an interview. Mr Kelimbetov said another debt issue would likely be made as a sukuk, a bond linked to Islamic banking principles.

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(News report from Issue No. 206, published on Oct. 29 2014)

Kazakhstan to issue dollar denominated bond

SEPT. 25 2014 (The Conway Bulletin) – Kazakhstan will issue a US dollar denominated bond later this year, its first since 2000, Reuters reported. Government officials have launched a roadshow to drum up support for the debt issue. These are difficult times, though, because of the knock-on effect of sanctions on Russia.

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(News report from Issue No. 202, published on Oct. 1 2014)

Azerbaijan promotes its Eurobonds

MAY 29 2014 (The Conway Bulletin) -The International Bank of Azerbaijan (IBA) started promoting its Eurobond issue. IBA plans to issue between $350m and $500m of Eurobonds. Azerbaijan’s ministry of finance owns 50.2% of IBA. The Eurobond sale will indicate investors’ appetite for Azerbaijan.

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(News report from Issue No. 187, published on JUNE 4 2014)

Azerbaijan launches first Eurobond

MARCH 10 2014 (The Conway Bulletin) — It’s tough times for emerging market economies. Currencies are under pressure from an upturn in the US economy and Russia’s moves in Ukraine have made people nervous.

Azerbaijan, though, seems to be handling all this with aplomb with the successful launch of its inaugural $1.2b 10-year Eurobond.

Analysts said that orders came in for around 4b, making the issue more than three times over-subscribed.

The yield came in at around 5%, roughly 200 basis points over US treasures. This shows that investors feel that Azerbaijan is a relatively good bet at the moment — certainly better than other parts of the former Soviet Union which have been dented by the brewing crisis in Ukraine.

Although analysts have said that Azerbaijan does not need to issue the loan, it may have wanted to put a marker down for any future issues.

It will also help other companies from Azerbaijan gauge how easy, or difficult, it is to enter the debt market. The state-controlled International Bank of Azerbaijan said it may look to enter the debt market this year.

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Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 175, published on March 12 2014)

Azerbaijan prepares Eurobond issue

MARCH 3 2014 (The Conway Bulletin) — Azerbaijan started preparations for its Eurobond debut despite a downturn in emerging market debt. Azerbaijan is cash rich and doesn’t really need to borrow market on the international market. Instead it may use the Eurobond for promoting the country and setting a benchmark for other debt issues.

(News report from Issue No. 174, published on March 5 2014)

Kazakhstan delays Eurobond issue

SEPT. 26 2013 (The Conway Bulletin) — Kazakhstan will delay the issue of its long-muted $1b Eurobond until next year, Kuat Akizhanov, head of the ministry of finance’s borrowing department said in an interview with local media. Kazakhstan, which has not issued a Eurobond since 2007, has been talking about a sovereign debt issue throughout the year.

(News report from Issue No. 154, published on Oct. 2 2013)

‘Kardashian bond’ launched in Armenia

SEPT. 23 2013 (The Conway Bulletin) — Kim Kardashian, the 32-year-old Los Angeles-based ethnic Armenian, is best known across the globe for starring in a reality TV show. Now she’ll also be known, in some circles at least, for lending her name to Armenia’s inaugural sovereign debt issue.

Armenia’s $700m Eurobond issue on Sept. 23, unofficially dubbed the ‘Kardashian bond’, did rather well. This was Armenia’s first sovereign debt issue and a real test of investors’ confidence in the country and appetite for risk in the South Caucasus.

Armenia’s government had said it needed to raise the cash to pay back a $500m loan it borrowed from Russia in 2009 to weather the global financial crisis.

It’s been a busy, somewhat controversial, year for Armenia with a disputed presidential election in February and a surprise decision last month to eschew closer ties with the EU to instead join Russia’s Customs Union. The economy, too, has caused some concern with inflation hovering around 9%, far above the Central Bank’s target.

Regardless, investors warmed to Armenia’s Kardashian bond and the initial yield on the 7-year bond was shortened to 6.25% from 6.375%, according to Reuters.

Not a bad debut on the sovereign debt market for Armenia and Kim Kardashian.

(News report from Issue No. 153, published on Sept. 25 2013)