Friday, April 24 2020 11:21

ArmInfo.The universal credit company First Mortgage Company (PIK UKK) plans to issue two tranches of registered, coupon, non-documentary bonds with issue volumes of  100 million drams and $ 800 thousand secured by mortgage loans. This  is evidenced by the prospectus for the issue of these bonds posted on  the website of the Central Bank of Armenia.

According to the document, 1,000 dram and 8,000 dollar bonds will be  issued, each with a nominal value of 100 thousand drams and $ 100,  respectively. The coupon nominal yield on dram bonds is 10.5%, and on  dollar bonds - 6.4%. The maturity of these bonds is 3 years. Coupon  payments are provided once every six months. Release and placement of  tranches will take place on the same day. The placement of bonds of  these two tranches was entrusted to Ameriabank, which in the  secondary market will act as both an underwriter and a market-maker  of bonds. A guaranteed placement agreement was signed between FMC UCC  and Ameriabank on December 17, 2019.

The ratio of the nominal value of the mortgage portfolio employee to  the tranches of bonds for the dram issue amounted to 204% as of March  2, 2020, and 146% for the dollar one, and these figures may change  during the circulation of these securities, but should not be lower  than the minimum threshold established by law.

A mortgage portfolio securing bonds must meet the following criteria:  territorial location of collateral - Yerevan; maximum loan / pledge  ratio - 70%; the earliest repayment period is March 10, 2026; loan as  of March 2, 2020 should be classified as standard; according to the  loan repayment history, at least one repayment (interest payments and  principal amount) must be.

The FMC UCC filed the application for the planned issue with the  Central Bank of Armenia on January 23, 2020, and since there were no  refusals from the Central Bank within 30 legislative days, the  application is considered approved.

Decisions on these issues were made at the general meeting of  shareholders of PIK UKK on December 16, 2019 and March 27, 2020.

As David Atanesyan, FMC UCC Director General, informed ArmInfo, the  bonds will be issued in May after the lifting of the state of  emergency, but nonetheless, everything will depend on the development  of the situation related to measures to prevent the spread of the  coronavirus pandemic.

Recall that the debut of securitization of mortgage bonds in the  capital market of Armenia took place on December 12, 2017 and on the  same day it was possible to place the entire volume presented. Then  FMC UCC issued 2 tranches - dollar and dram bonds in the amount of  100 million drams and $ 500 thousand secured by mortgage loans. The  coupon yield on dram bonds was 10.5%, and on dollar bonds - 6.5%. The  maturity of these securities was set at 2 years. ARARATBANK acted as  an underwriter and market maker of toga bonds.

According to the ranking of credit companies of Armenia as of  December 31, 2019, prepared by ArmInfo IC, the loan portfolio of the  first Mortgage Company UCC ("PIC") amounted to 6.8 billion drams or $  14.3 million with an annual decline of 1.5%. In the structure of the  company's assets, the share of the loan portfolio decreased over the  year from 92% to 88%. The "First Mortgage Company" UKK has been  operating in the Armenian market since April 2004. Shareholders are  Nshan Atinizyan - 35%, Margrit Atinisyan - 35%, David Atanesyan -  30%.