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EUROBONDS ISSUE: ARMENIA PLANS ANOTHER ISSUANCE AMID CONCERNS OF GROWING FOREIGN DEBT
ECONOMY | 13.03.15 | 15:35
By SARA KHOJOYAN
ArmeniaNow reporter
While experts in Armenia warn that by means of issuing new currency
bonds the government will accumulate more foreign debt, which already
exceeds a third of the gross domestic product, companies in Europe
that are licensed by the Armenian government have started negotiations
directed toward replacing bonds and attracting more buyers.
On Thursday Deutsche Bank AG, HSBC Bank J.P. Morgan Securities said
that Armenian bonds will start to be sold from next week on - March
16-18, Bloomberg reported, citing an unnamed source.
The Ministry of Finance does not yet comment on this news.
The government approved the agreements and documents related to the
process of bond issuance on March 10 at the meeting of the executive
when Minister of Finance Gagik Khachatryan said that their issuance
is one of the sources of financing the deficit of the state budget.
"The function of managing the state debt is not limited to the
replacement of bonds. The management of the liabilities is no less
important," the minister said.
It is noteworthy that Armenia's state, as well as foreign debt
significantly decreased last year. Specifically, the state debt
decreased by more than $140 million, forming $4.44 billion by the
end of 2014. The foreign debt decreased by more than $110 million -
forming $3.78 billion by the end of last year.
This year, however, the foreign debt will increase, because Armenia
wants to involve $700 million in the form of Eurobonds. Bonds of
similar volume were first issued in September of 2013 - for seven
years and six percent profitability.
According to international financial consulting centers, bonds to be
issued this time will have profitability of more than seven percent,
because the Armenian economy will be affected by hardships in the
Russian economy, as well as in January the country's rating was
decreased at once by two international financial rating structures -
Moody's and Fitch.
http://armenianow.com/economy/61429/armenia_eurobonds_economy_issue
From: A. Papazian
ECONOMY | 13.03.15 | 15:35
By SARA KHOJOYAN
ArmeniaNow reporter
While experts in Armenia warn that by means of issuing new currency
bonds the government will accumulate more foreign debt, which already
exceeds a third of the gross domestic product, companies in Europe
that are licensed by the Armenian government have started negotiations
directed toward replacing bonds and attracting more buyers.
On Thursday Deutsche Bank AG, HSBC Bank J.P. Morgan Securities said
that Armenian bonds will start to be sold from next week on - March
16-18, Bloomberg reported, citing an unnamed source.
The Ministry of Finance does not yet comment on this news.
The government approved the agreements and documents related to the
process of bond issuance on March 10 at the meeting of the executive
when Minister of Finance Gagik Khachatryan said that their issuance
is one of the sources of financing the deficit of the state budget.
"The function of managing the state debt is not limited to the
replacement of bonds. The management of the liabilities is no less
important," the minister said.
It is noteworthy that Armenia's state, as well as foreign debt
significantly decreased last year. Specifically, the state debt
decreased by more than $140 million, forming $4.44 billion by the
end of 2014. The foreign debt decreased by more than $110 million -
forming $3.78 billion by the end of last year.
This year, however, the foreign debt will increase, because Armenia
wants to involve $700 million in the form of Eurobonds. Bonds of
similar volume were first issued in September of 2013 - for seven
years and six percent profitability.
According to international financial consulting centers, bonds to be
issued this time will have profitability of more than seven percent,
because the Armenian economy will be affected by hardships in the
Russian economy, as well as in January the country's rating was
decreased at once by two international financial rating structures -
Moody's and Fitch.
http://armenianow.com/economy/61429/armenia_eurobonds_economy_issue
From: A. Papazian