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).

POST A COMMENT
Input digits     


News
Tigran Avinyan and Mark Pritchard discussed prospects for deepening  cooperation between Armenia and the UKTigran Avinyan and Mark Pritchard discussed prospects for deepening  cooperation between Armenia and the UK
PSRC introduced new regulations for natural gas consumersPSRC introduced new regulations for natural gas consumers
Study: Even with small volumes of the market, Armenia is able to  triple the volume of investmentsStudy: Even with small volumes of the market, Armenia is able to  triple the volume of investments
"Rosgosstrakh Armenia" continues to lead among insurance companies in  list of major taxpayers in Armenia
Government approved distribution among communities of subventions in  amount of 1.9 billion dramsGovernment approved distribution among communities of subventions in  amount of 1.9 billion drams
Minister: Positive expectations formed in Armenia`s business  communityMinister: Positive expectations formed in Armenia`s business  community
EAEU countries began to jointly produce elevatorsEAEU countries began to jointly produce elevators
Subregional Innovation Policy Outlook launched in ArmeniaSubregional Innovation Policy Outlook launched in Armenia
Expert: State Budget revenues over-fulfillment has nothing to do with  real GDP growth Expert: State Budget revenues over-fulfillment has nothing to do with  real GDP growth 
Pension fund Amundi-ACBA-Asset-Management celebrates 5 years of  activityPension fund Amundi-ACBA-Asset-Management celebrates 5 years of  activity
Vache Terteryan: Armenia is interested in localizing alternative  energy sourcesVache Terteryan: Armenia is interested in localizing alternative  energy sources
Possible disputes over the construction project of a new thermal unit  in Yerevan will be resolved in the International Chamber of CommercePossible disputes over the construction project of a new thermal unit  in Yerevan will be resolved in the International Chamber of Commerce
Chinese company interested in setting up basalt fiber manufacturing  enterprise in ArmeniaChinese company interested in setting up basalt fiber manufacturing  enterprise in Armenia
In 2019-2023 In 2019-2023 "ML MINING" LLC invests in development of production of  4 billion drams
Karen Yeghiazaryan has been appointed as Chairman of Management Board  of EvocabankKaren Yeghiazaryan has been appointed as Chairman of Management Board  of Evocabank
Babken Tunyan: The PABSEC platform is needed for communication; one  should not underestimate or overestimate it.Babken Tunyan: The PABSEC platform is needed for communication; one  should not underestimate or overestimate it.
"Haypost" and "Energoimpex" companies will remain in ownership of  Armenian state
At initiative of EC, a working meeting was held at Ministry of  Economy of RA regarding use of EU Taiex and Twining tools by public  sectorAt initiative of EC, a working meeting was held at Ministry of  Economy of RA regarding use of EU Taiex and Twining tools by public  sector
19th International Specialized Exhibition 19th International Specialized Exhibition "FOOD & DRINKS EXPO 2019"  will be held in Yerevan
Armenia approved a protocol on cooperation of EAEU countries with  Vietnam on  exchange of customs informationArmenia approved a protocol on cooperation of EAEU countries with  Vietnam on  exchange of customs information
7.4 billion drams out of an additional 62 billion dram in tax  revenues will be additionally allocated to the implementation of  programs in the field of road construction in Armenia7.4 billion drams out of an additional 62 billion dram in tax  revenues will be additionally allocated to the implementation of  programs in the field of road construction in Armenia
Park Group Company intends to implement in Yerevan a large investment  program worth 7.5 billion dramsPark Group Company intends to implement in Yerevan a large investment  program worth 7.5 billion drams
Armenian government to allocate 40 million drams to repair  Yerevan-Garni-Geghard roadArmenian government to allocate 40 million drams to repair  Yerevan-Garni-Geghard road
Jermuk Group Company invests AMD 363 million in production expansionJermuk Group Company invests AMD 363 million in production expansion
Minister assures: household appliances production plant in Armenia is  not a mythMinister assures: household appliances production plant in Armenia is  not a myth
Chinese business intends to invest $ 5 million in the production and  bottling of mineral waterChinese business intends to invest $ 5 million in the production and  bottling of mineral water
Four telecom operators in Armenia reduced tax payments to the state  treasury in I quarter of 2019 by 45.6% per annumFour telecom operators in Armenia reduced tax payments to the state  treasury in I quarter of 2019 by 45.6% per annum
EAEU is developing cooperation with the Pacific AllianceEAEU is developing cooperation with the Pacific Alliance
Gazprom Armenia continues to top the list of the largest taxpayersGazprom Armenia continues to top the list of the largest taxpayers
Armenian MFA: Polish companies are interested in the Armenian marketArmenian MFA: Polish companies are interested in the Armenian market


Exchange rates
24.05.2019
RUB7.440.02
USD480.030.05
EUR537.152.69
GBP609.352.85
CAD356.930.62
JPY43.770.16
CNY69.580.01
CHF478.552.90


Experts
Yulia Ustyugova: Armenia can get access to IMF “insurance line”Yulia Ustyugova: Armenia can get access to IMF “insurance line”
Armand Arton: The question whether citizenship should be granted in  return for investments is rather rhetoricalArmand Arton: The question whether citizenship should be granted in  return for investments is rather rhetorical
Former head of the Ministry of Finance: <Confrontation> with Lydian may cost much to ArmeniaFormer head of the Ministry of Finance: with Lydian may cost much to Armenia
Vardan Aramyan: It will be unreasonable if the government goes to revise the allowable national debt ceiling in GDPVardan Aramyan: It will be unreasonable if the government goes to revise the allowable national debt ceiling in GDP
HSBC Bank Armenia increases efficiency and focuses on digital servicesHSBC Bank Armenia increases efficiency and focuses on digital services
Bulgarian Minister: The level of Armenian-Bulgarian economic  cooperation is still unsatisfactoryBulgarian Minister: The level of Armenian-Bulgarian economic  cooperation is still unsatisfactory
Expert: Recruitment market in Armenia from the point of view of  supply and demand is sleepingExpert: Recruitment market in Armenia from the point of view of  supply and demand is sleeping
Expert: Despite the adequacy of Armenian banks` capitals, the  opportunities for its optimal use are severely limitedExpert: Despite the adequacy of Armenian banks` capitals, the  opportunities for its optimal use are severely limited
Association of Organic Agriculture is being created in ArmeniaAssociation of Organic Agriculture is being created in Armenia
Pailak Tadevosyan: Governments change in Armenia, but taxation  approaches do not changePailak Tadevosyan: Governments change in Armenia, but taxation  approaches do not change
Rouben Indjikian: Everyone should follow the established unified and fair rules of the gameRouben Indjikian: Everyone should follow the established unified and fair rules of the game
Mher Arakelyan:  Armenia`s payment business has great prospectsMher Arakelyan:  Armenia`s payment business has great prospects
Rating-Agentur Expert RA GmbH and AmRating issued an industry report  on Armenia`s banking systemRating-Agentur Expert RA GmbH and AmRating issued an industry report on Armenia`s banking system
Igor Nazaruk: Each planted sprout has the right to a successful prospect if it is cherished and taken care ofIgor Nazaruk: Each planted sprout has the right to a successful prospect if it is cherished and taken care of
Ara Khzmalyan: Armenia is comfortable to Russian touristAra Khzmalyan: Armenia is comfortable to Russian tourist
The Armenian delegation to the US followed the advice of President TrumpThe Armenian delegation to the US followed the advice of President Trump
Outflow of population and passivity of the Diaspora pushes property prices downOutflow of population and passivity of the Diaspora pushes property prices down
Finombudsman: Amendments to the Civil Code on the imposition of fines and penalties will reduce the number of outstanding loans and  non-creditworthy consumersFinombudsman: Amendments to the Civil Code on the imposition of fines and penalties will reduce the number of outstanding loans and non-creditworthy consumers
Vahan Shakaryan: If we promote Armenia, the promotion of economic sectors will not be a run with obstacles, but a light run for short distancesVahan Shakaryan: If we promote Armenia, the promotion of economic sectors will not be a run with obstacles, but a light run for short distances
Gagik Aghajanyan: There is no need to look for alternatives - it is necessary to work and develop actual   directionsGagik Aghajanyan: There is no need to look for alternatives - it is necessary to work and develop actual   directions

Search by date

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

Commented
Forecast: Electricity exports to the Middle East through Iran are a  key component of Armenia`s geo- economic strategyForecast: Electricity exports to the Middle East through Iran are a  key component of Armenia`s geo- economic strategy
ArmInfo IC: In Armenia,  CMTPL loss ratio increased up to 64.5% in Q1  2019ArmInfo IC: In Armenia,  CMTPL loss ratio increased up to 64.5% in Q1  2019
Overdue loans accelerate growth in banking system of ArmeniaOverdue loans accelerate growth in banking system of Armenia
RA Prime Minister: European Union is not ready to finance 100% of  development programs implementation in ArmeniaRA Prime Minister: European Union is not ready to finance 100% of  development programs implementation in Armenia
T.Avinyan: The Government is open for cooperation and encourages  active dialogue and interaction in all areas T.Avinyan: The Government is open for cooperation and encourages  active dialogue and interaction in all areas 
Agreement on construction of a new unit with combined gas cycle  signed in YerevanAgreement on construction of a new unit with combined gas cycle  signed in Yerevan
Veolia Jur: Regulatory charges are false and unfoundedVeolia Jur: Regulatory charges are false and unfounded
Armenian Prime Minister: We are gaining momentum for economic takeoffArmenian Prime Minister: We are gaining momentum for economic takeoff
Through the mobile banking application of Ardshinbank you can get a  loan in seconds.Through the mobile banking application of Ardshinbank you can get a  loan in seconds.
By the end of 2018, By the end of 2018, "Galburdjian Group" will launch the production of  sesame oil in Armenia
Expert: Armenia has a problem with effective use of water resources,  rather than small hydropower stationsExpert: Armenia has a problem with effective use of water resources,  rather than small hydropower stations
Investment forum Investment forum "Energy Week 2018" to be held in Armenia
Expert: It is necessary to start implementing the program for the  construction of a new nuclear unitExpert: It is necessary to start implementing the program for the  construction of a new nuclear unit
The Armenian government suggests raising the minimum pension by 60%The Armenian government suggests raising the minimum pension by 60%
The updated feasibility study of construction project of electricity transmission line Armenia- Georgia will be ready by the end of the year - the Ministry of EnergyThe updated feasibility study of construction project of electricity transmission line Armenia- Georgia will be ready by the end of the year - the Ministry of Energy
Eurasian Development Bank wishes to expand its activities in ArmeniaEurasian Development Bank wishes to expand its activities in Armenia
$ 100 million to be invested in repatriation project Build Armenia$ 100 million to be invested in repatriation project Build Armenia
FRV: Armenia`s growing desire to increase renewable energy sources is  a decisive factorFRV: Armenia`s growing desire to increase renewable energy sources is a decisive factor
Suren Papikyan: It`s safe now to do business in Armenia, assures  Armenian MinisterSuren Papikyan: It`s safe now to do business in Armenia, assures  Armenian Minister
Armenian state debt started reducing up to $6.7 bln to June 1 2018Armenian state debt started reducing up to $6.7 bln to June 1 2018
Minister: Implementation of program on liberalization of the electric  power complex of Armenia will be completed within the next two yearsMinister: Implementation of program on liberalization of the electric  power complex of Armenia will be completed within the next two years
Nikol Pashinyan: In a number of cases after paying fines and  penalties the borrowers will be allowed to take new loan Nikol Pashinyan: In a number of cases after paying fines and  penalties the borrowers will be allowed to take new loan 
German bank KFW urges Armenia to build power line in the direction to  GeorgiaGerman bank KFW urges Armenia to build power line in the direction to  Georgia
Anna Chobanyan-one of most likely candidates for new Head of General  Department of Civil Aviation Anna Chobanyan-one of most likely candidates for new Head of General  Department of Civil Aviation 
IFAD confirms its readiness to develop and implement new joint programs with Armenia`s Agriculture MinistryIFAD confirms its readiness to develop and implement new joint programs with Armenia`s Agriculture Ministry
Rosselkhoznadzor asks not politicize the issue of deliveries of tomatoes from Armenia to RussiaRosselkhoznadzor asks not politicize the issue of deliveries of tomatoes from Armenia to Russia