Friday, November 25 2016 19:16
Karina Melikyan

In Jan-Sept 2016 transactions with Armenian Eurobonds totaled $52.12 mln and the yield declined from 7.01% to 5.84%

In Jan-Sept 2016 transactions with Armenian Eurobonds totaled $52.12  mln and the yield declined from 7.01% to 5.84%

ArmInfo. In Jan-Sept 2016, the  transactions with Armenian Eurobonds of the second tranche totaled  $52.12 mln and the yield declined from 7.01% to 5.84%.  According to  the Central Bank of Armenia, the biggest amount of transactions was  fixed in March - $14 mln, with the yield being 6.44%, and the minimum  amount was registered in May - $2 mln, with the yield being 6.66%.

As of 1 October 2016 (since the debut issue of Armenian Eurobonds)  the transactions with Eurobonds on the secondary market amounted to  almost $219 mln. The yield first grew from 6.25% to 7.01%, but in  Jan- Sept 2016 it dropped to 5.84%.

Earlier, Deputy Finance Minister of Armenia Atom Janjughazyan told  ArmInfo that the Armenian  Government was planning another issue of  Eurobonds before 2020. The  next issue of Eurobonds is aimed at  successful management of the  country's state debt.  Janjughazyan  said that the second issue of Eurobonds  proved to be successful. The  deputy minister is convinced that if the  country failed to buy out  $200 mln of the debt in 2015, the state  debt serving in 2020 would  not cost $921 mln, but much more, which "would become a real horror  for the budget". The expert stressed the  need to choose the right  moment for the next issue of Eurobonds. If at the moment of the issue  the debt-to- GDP ratio is 90%, the yield  will be under threat; and  quite the opposite - if positive macroeconomic indices are ensured,  the debt will be serviced at a low  interest rate. 

To note, the second issue of sovereign bonds in the amount of $500  mln,  10-year maturity and 7.5% yield took place on 19 March 2015.  The  proceeds from the second issue of Eurobonds totaled $487 mln.  Part of  the amount received from the sale of these bonds ($205 mln)  was spent  on the buyout of the first issue of the bonds. The  remaining part was  transferred to the treasury account of Armenia  and to the budget  system of the country. Experts said that this  proved to be the most  expensive foreign debt the Government had ever  attracted. 

By the Armenian Central Bank's data, in 2015 the  transactions with  Armenian Eurobonds on the secondary market amounted  to 110.36 mln  USD, with the average yield being 6.46%. In early 2015,  the Armenian  bonds mainly appreciated and the yield ranged within  6-6.4%, whereas  in late 2015 the bonds depreciated to 7%. In early  2016, amid the  USD growth in the republic, depreciation remained at  7%.  However,  by March 2016, amid appreciation of the national  currency, the  Eurobonds started growing in price and the average  yield made up  6.44%. On April 5, Bloomberg reported that the price of the Armenian  Eurobonds (with the maturity till 2020) dropped right  after the  outbreak of military actions (Azerbaijan's aggression in  April  -editor's note), and the yield grew by 16 pct points to 6.52%.  Since  early 2016, the yield of both Eurobonds and AMD government  bonds of  Armenia has declined regardless of the April events.

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