Wednesday, June 13 2018 15:35
Alexandr Avanesov

Armenian government to refinance debt on Eurobonds

Armenian government to refinance debt on Eurobonds

ArmInfo.Armenian government will refinance Eurobonds. This June 13, presenting at the plenary meeting of the National Assembly of the report on the implementation  of the budget of the country in 2017, said the Minister of Finance of  Armenia Atom Janjughazyan.

According to him, it is possible that the new issue of Eurobonds will  occur until 2019. The funds received as a result of refinancing will  be used to repay the previous debt on Eurobonds in the amount of $  500 million. "There is no precedent in the world when the entire  amount is paid," the Finance Minister said, adding that in the  process of economic growth, the state debt will be gradually repaid  countries. He also said that 122 billion drams were allocated to  service the state debt, which exceeded the $ 6 billion mark, in 2017.  Last year the head of the Department for the Management of the State  Debt of the Ministry of Finance of Armenia Arshaluys Margaryan told  ArmInfo that the Armenian government plans to issue a new issue of  Eurobonds only in early 2020. According to him, if by the end of 2019  Armenia does not face an unconventional situation, when the only  solution is a new issue of Eurobonds, another issue is expected to  ensure the repayment of the state debt in 2020. The volume of the  issue, as noted by Margaryan, will be similar to the amount that will  be spent on servicing the state debt on Eurobonds - $ 500 million or  even slightly higher.

The next placement of Eurobonds, as the representative of the  Ministry said, can not be an end in itself.  Before taking such a  decision, the potential of the domestic capital market, the prospects  for raising funds from external sources will be explored. "Otherwise,  this phenomenon is very dangerous." This measure can not be resorted  to without studying all the pros and cons," Arshaluys Margaryan said,  noting that due to the high degree of foresight in such matters, the  relevant experts of the Ministry of Finance deserved the appreciation  of international partners.

To date, Armenia has carried out two issues of Eurobonds. The first  issue was made on September 19, 2013, Eurobonds were issued for $ 700  million with a maturity of 7 years until March 30, 2020, the yield  was 6.25%. The government repaid ahead of schedule the loan taken  from Russia for $ 500 million. The main underwriters were Deutsche  Bank AG, London Branch, HSBC Bank plc and J.P.Morgan Securities plc.  The yield of Armenian Eurobonds from September 2013 to the end of  January 2014 decreased from 6.25% to 5.85-5.8% to about $ 56 million,  and at the end of 2015 it increased to 6.76%, at the end 2016  decreased to 4.99%.

The second tranche of sovereign bonds worth $ 500 million for a  period of 10 years and with a yield of 7.5% was made by Armenia on  March 19, 2015. The proceeds from the second issue of Eurobonds  amounted to $ 487 million. A part of the amount received from the  sale of these bonds in the amount of $ 205 million, went to buy out  the first issue of bonds with redemption in 2020. The remaining  amount was transferred to the treasury account of the Republic of  Armenia and the country's budget system. As Former Deputy Finance  Minister previously told ArmInfo, and now the head of the agency Atom  Janjughazyan, the second issue of Eurobonds turned out to be  successful. He is sure that if there had been no repayment of $ 200  million of debt in 2015, servicing Armenia's national debt in 2020  would not have cost $ 921 million, and it will have exactly the same  amount needed to service the existing state debt as of October 31,  2016, and $ 921 million plus $ 200 million, which "would be a real  nightmare for the budget." Meanwhile, experts said that this, in  fact, was the most expensive external debt that was ever attracted by  the government of the country.

However, that due to the growing national debt, which amounted to $  6.9 million today, and high migration, the specific debt load per  capita exceeded $ 2,000, of which over $ 1.7 thousand fell to the  share of external debt (against $ 550 in 2009). Taking into account  the real scale of migration, the burden of public debt per capita  would be much higher (according to the statistical data for 2011-2016  the population of the RA decreased from 3.274 million to 2.987  million).

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Government Bonds

 

ISIN AMGB1029A250
Auction ID AMGB1029A250A
Date 12.05.2017
Issue date 29.10.2015
Issue volume (AMD) 50 000 000 000
Maturity date 29.10.2025
Coupon year yield 11.00%
Auction volume (AMD) 1000 000 000 - 2.000 000 000
Auction date 12.05.2017
DLS
Total amount (AMD) 1 000 000 000
Amount of the total bids (AMD) 787 200 000
Amount of the total accepted bids (AMD) 787 200 000
Cut of yield (%) 10,6447
Weighted avrage yield (%) 10,6447
Auction max  yield (%) 10,6447
Auction min  yield (%) 10,6447
Number of participants 5
ArmEx

 

СПРОС (Покупка)

USD

Средневзв. Цена

482,00

ПРЕДЛОЖЕНИЕ (Продажа)

  USD

Средневзв. Цена

-

СДЕЛКИ

USD

Цена откр.

482,00

Цена закр.

482,00

Мин. Цена

482,00

Макс. Цена

482,00

Ср/взв. Цена

482,00

-0.16

Кол-во сделок

1

Объем (инвал.)

200 000

0бъем (драм)

96 400 000

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