Monday, September 25 2017 18:08
Naira Badalian

Vardan Aramyan: interest in Armenian securities grows on international capital market

Vardan Aramyan: interest in Armenian securities grows on international capital market

ArmInfo. The third tranche of Eurobonds will be implemented by the end of 2019-2020. The volume of the issue will be similar to the amount that the government will send to servicing the state debt on Eurobonds - about $ 500 million, Armenian Finance Minister Vardan Aramyan told a press conference on Sept. 25, ArmInfo correspondent said.

The Minister reminded that to date, Armenia held 2 issues - the first placement of Eurobonds was carried out by the Republic 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 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. Now their yield on the market has decreased by 2 pp. According to Aramyan, the lender usually calculates his risks correctly and closely monitors the debtor's behavior.

In this context, if Armenia pursued an unreasonable economic policy, investors would try to free themselves from Armenian state bonds.  "Meanwhile, interest in our securities is growing in the international capital market," Aramyan said. In addition, as a result of the fiscal policy pursued by the Armenian government, positive changes are also observed according to the estimates of international structures - "Moody's" and "Fitch" recognized Armenia's fiscal policy as reasonable.  Meanwhile, according to Vardan Aramyan, the Armenian government does not plan to issue Eurobonds in the medium term and plans to focus more on domestic debt. As the minister has pointed out, the Finance Ministry's strategy is to gradually transfer the taking of debt from the external market to the domestic market, since, first of all, it makes the republic independent of fluctuations in the exchange rate. In addition, the residents' funds invested in securities provide a multiplier effect in the country's economy. And most importantly, as Aramyan stressed, there is not a single country that would find itself in the debt crisis because of the internal debt. "Therefore, if a country is able to take a debt on the domestic market, it goes for it, which will be done in accordance with the medium-term expenditure program of Armenia for 2018- 2020," concluded the head of the Armenian Ministry of Finance.

Recall that today Armenia has carried out two issues of Eurobonds.  The first issue was made on September 19, 2013 - by $ 700 million and 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 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 the experts stated, this, in fact, was the most expensive external debt that was ever attracted by the government of the country. At present, Armenia's domestic debt is about 523 billion drams, securities with an average maturity of more than 8 years. At the end of 2015, domestic debt was 14.4% of the total debt, and by the end of 2016 it had risen to 19.3%. The total volume of government borrowed bonds from individuals is about 2.5 billion.

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Government Bonds

Issue volume

10 billion

Volume of T-bills for placement

200 million

Volume of submitted competitive applications

200 million

Volume of satisfied bids

200 million

Yield at cut-off price

 5.8314%

Maximum yield

 5.8314%

Мinimum yield

 5.8314%

Weighted average yield

 5.8314%

Number of participants

2

The maturity date of T-bills

03.02.2020

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