Tweet
Armenian government loses sense of reality? - newspaper
May 18, 2013 | 09:14
YEREVAN. - The Government of Armenia's recent decision to issue
Eurobonds tends to become one of the most startling decisions by the
working government, Haykakan Zhamanak daily reports.
`What is the problem? Eurobonds are a means to include external debt.
The government decided to sell $500 million-worth Eurobonds. Their
initial interest rate is about 6 percent, [and] the period, ten years.
That is, after ten years, the government is obliged to buy back these
Eurobonds for $500 million and pay another 60 percent. Moreover, it is
not yet known what [respective] percentage will be set in the
international market. It is not ruled out that 8 or 10 percent would
be set for our Eurobonds. In this case, our external debt will
increase by up to $1 billion.
But more interesting is why the government decided to issue these
Eurobonds at this time. As per the PM, this is done to close the
$500-million loan from Russia. To note, the interest rate of this loan
is 3.5 percent. So it turns out that the government is taking an
extremely expensive loan to close an inexpensive and more convenient
loan.
The decision to issue Eurobonds shows that the [Armenian] government
has lost the sense of reality,' Haykakan Zhamanak writes.
News from Armenia - NEWS.am
From: A. Papazian
May 18, 2013 | 09:14
YEREVAN. - The Government of Armenia's recent decision to issue
Eurobonds tends to become one of the most startling decisions by the
working government, Haykakan Zhamanak daily reports.
`What is the problem? Eurobonds are a means to include external debt.
The government decided to sell $500 million-worth Eurobonds. Their
initial interest rate is about 6 percent, [and] the period, ten years.
That is, after ten years, the government is obliged to buy back these
Eurobonds for $500 million and pay another 60 percent. Moreover, it is
not yet known what [respective] percentage will be set in the
international market. It is not ruled out that 8 or 10 percent would
be set for our Eurobonds. In this case, our external debt will
increase by up to $1 billion.
But more interesting is why the government decided to issue these
Eurobonds at this time. As per the PM, this is done to close the
$500-million loan from Russia. To note, the interest rate of this loan
is 3.5 percent. So it turns out that the government is taking an
extremely expensive loan to close an inexpensive and more convenient
loan.
The decision to issue Eurobonds shows that the [Armenian] government
has lost the sense of reality,' Haykakan Zhamanak writes.
News from Armenia - NEWS.am
From: A. Papazian