Azerbaijan not to issue sovereign bonds in 2011

Business Materials 3 May 2011 19:25 (UTC +04:00)

Azerbaijan, Baku, May 3 / Trend N.Ismayilova /

Azerbaijan has postponed plans to issue eurobonds in 2011, Deputy Finance Minister Azer Bayramov said on Tuesday.

"The situation in the world market is better than before. But nevertheless, it is not so favorable, as we would like, because the market still has "expensive money". So, the country is unlikely to issue eurobond in 2011," Bayramov said.

He said Azerbaijan reduces the size of its budget deficit for this reason.
Previously, Azerbaijan intended to issue sovereign bonds in the amount of $ 300 million, which was later revised upwards to $ 500 million.

Investment banks Deutsche Bank AG London and Citigroup Global Markets Limited were selected managers of the government to implement the first issue of eurobonds.

Given the uncertainty of the government's plans to enter the global capital markets, the country's business entities have also not yet realized plans to place eurobonds on foreign markets , expecting a sovereign bonds issue.

However, Azerbaijan Railways became the first state-owned company that issued its first Loan Participation Notes eurobond, totaling $125 million. Their maturity date is scheduled for Feb. 18, 2016.

Earlier the State Oil Company of the Azerbaijan Republic (SOCAR) announced its plans hold a eurobond roadshow. As SOCAR Economic Affairs Vice President Suleyman Gasimov told Trend earlier, the company's legal adviser has already been tasked with preparing a contract and a legal avenue for investors. Afterward, the company will hold presentations on various markets.

According to him, the debut bond placement is expected to reach $500 million, which will be available in five tranches of $100 million each over a five-year period.

In addition, several Azerbaijani banks including the International Bank of Azerbaijan ($200 million), Unibank ($150 million) and Bank Standard ($150-200 million) have also postponed their plans.