Thursday, September 19 2019 15:24
Naira Badalian

Armenia announces placement of 10-year Eurobonds

Armenia announces placement of 10-year Eurobonds

ArmInfo. Armenia in international markets announced the release of 10-year Eurobonds in the amount of $ 500 million at a rate of 4.625% per annum. The  application book is open. This was reported by ArmInfo sources in  banking circles.

Earlier, ArmInfo reported that the Government of Armenia on July 4  approved a draft decision "On Establishing the Specifics of  Organizing Procedures for Acquiring Services for the Issue, Placement  and Redemption of Eurobonds", thus starting the preparatory process  for placing the third tranche of Eurobonds and refinancing debt on  previously issued securities . In particular, it will determine the  procedures for acquiring the services necessary for the  implementation of the process of refinancing Eurobonds, and for  attracting international underwriters and legal advisers.


The third tranche of Armenian Eurobonds at the end of 2019 was an  expected event. Indeed, according to the schedule of repayment of  government debt, until 2054, the most peak in servicing the public  debt will be 2020 and 2025. In 2020, Armenia will have to "pay out"  about 417 billion drams or $ 857 million (the calculated exchange  rate of the Armenian dram to the dollar is $ 1 = 486.55 drams), and  in 2025, to repay the principal amount of all government debt formed  at the end of December 2018 The price of the issue will be about 406  billion drams ($ 834 million). In both cases, $ 500 million of this  amount are repayments on Eurobonds. It was on the basis of these  calculations that the experts predicted the issue before / or in 2020  - before the next payment of the debt on the first tranche, which is  scheduled for September 30, 2020.

As the head of the Department of Public Debt Management of Armenia at  the Ministry of Finance Arshaluys Margaryan stated to ArmInfo,  earlier, the next placement of Eurobonds for the Ministry of Finance  is not an end in itself. According to him, before making such a  decision, the potential of the domestic capital market and the  prospects for raising funds from external sources will be studied.  After making a decision on a new issue, the Ministry of Finance will  invite potential investors and present the real situation in Armenia.  The latter, on the basis of their business preferences, will decide  on the advisability of replenishing investment portfolios with  Armenian sovereign securities.

It should be noted that today Armenia has carried out two issues of  Eurobonds. The first issue was carried out on September 19, 2013,  Eurobonds worth $ 700 million were issued with a maturity of 7 years,  until September 30, 2020. The yield on the placement was 6.25%. The  government repaid ahead of schedule a $ 500 million stabilization  loan taken from Russia. The main underwriters were Deutsche Bank AG,  London Branch, HSBC Bank plc and J.P. Morgan Securities plc. The  average yield of these Armenian sovereign securities is currently  3.19%.

The second tranche of sovereign bonds in the amount of $ 500 million  for a period of 10 years and with a yield of 7.5% was implemented by  Armenia on March 19, 2015. Proceeds from the second issue of  Eurobonds amounted to $ 488 million. Part of the amount received from  the sale of these bonds in the amount of $ 200 million went to the  redemption of the first issue of bonds with maturity in 2020. The  remaining amount was transferred to the single treasury account of  Armenia and sent to the budget system of the country. The average  yield is currently estimated at 3.97%. 

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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