ArmSwissBank Intending to Enter the Market of Corporate Bonds

In April ArmSwissBank is intending to issue bonds and launch three disbursements of 10 million USD bonds on the market.

                ArmSwissBank's Management Board Member and Deputy CEO-Director of Investment Department Karen Turyan has told ArmInfo journalist that the corporate bonds are to be placed on the IPO platform of NASDAQ OMX Armenia. "ArmSwissBank" CJSC is to carry out the placement, while another member of the stock will carry out the responsibilities of the marketmaker after the listing. The CBA registered the IPO prospectus on April 7 2015. The bonds are inconvertible with the right to free-floating. 

                According to Turyan, the issue and placement of the first three disbursements is to take place on April 16 2015. The first disbursement provides for 2000 bonds in total of 2 million USD. The nominal value per bond is 1000 USD, the yield - 7.5% per annum, the starting (max) rate or the striking price is 7.5%, and the circulation period is 3 years. The second disbursement provides for 3 thousand nominal corporate coupon bonds in total of 3 million USD.  The nominal value per bond is 1000 USD, the yield- 8% per annum. The starting (max) rate or the striking price is 8.5%; the circulation period is 5 years. Coupon payments are to be made quarterly. "The bank took interest in entering the market of corporate bonds after CBA had implemented several normative changes. According to the latter the bond-reserve rates are different from deposit ones. Now we are facing a task on getting investors interested by giving a wide range of liquidity", said K. Turyan adding that the bonds were an alternative to medium and large deposits.

                According to him, if the bank manages to provide the liquidity of the first issue of bonds, the next issues will be goal-oriented. "The bank will inform in advance where it is intending to channel the obtained funds.  The yield will depend on the goals", said K. Turyan.  According to ArmInfo's Financial Rating of Banks of Armenia, ArmSwissbank has one of the three biggest government bond portfolios in Armenia's banking system. As of Apr 2014 it made up 30bln AMD or 65.3% more than a year before. Government bonds account for 44% of the bank's assets.

                To note, ArmSwissBank CJSC was founded on 7 October 2004. The founder and CEO of "Franck Muller Watchland" Company, Vardan Sirmakes is the owner of 11670 (80 %) ordinary shares of "ARMSWISSBANK" CJSC. 2918 (20%) ordinary shares of the Bank belong to "Belegingsmachepij Jongo" LLC. The Bank specializes in corporate banking, investment banking and private banking. As of 1 July 2014, the assets of ArmSwissBank amounted to 72.3 bln AMD (24% year-over- year growth). The Bank's authorized capital increased by 44% to 10.1 bln AMD, and the total capital rose by 56% to 21 bln AMD. Over the same period, the Bank's loan book grew by 11% to 30.1 bln AMD, and the portfolio of securities increased by 70% to 32.3 bln AMD. In the first half of 2014, the Bank's profit totaled 1.2 bln AMD (67% year- over-year growth). The Bank's ROA made up 3.38% versus 3.18% in the first half of 2013, and ROE made up 13.61% versus 13.84% in the first half of 2013.