SOCAR gets ready to participation in local and international capital markets

Business Materials 1 March 2013 17:56 (UTC +04:00)

Azerbaijan, Baku, Mar. 1 / Trend, E. Ismayilov /

SOCAR (State Oil Company of Azerbaijan) is considering projects, for investment of funds obtained from the placement of corporate bonds, head of SOCAR Rovnag Abdullayev told reporters on Friday.

"SOCAR plans to issue bonds this year," Abdullayev said.

Moody Investors Service has today assigned a provisional (P) Ba1 rating to the approximately $1.0 billion worth of notes to be issued by the State Oil Company of the Azerbaijan Republic (SOCAR).

According to Abdullayev, SOCAR is also currently considering the need for the second issue of Eurobonds.

"Eurobond transactions are required not only for the attraction of funds, but also for the increase of the rating, image and recognition of the company in international markets to attract long term funds for large projects, considered by SOCAR", the head of the company said.

He noted the success of the debut issue of Eurobonds last year. "Although they were placed at 5.45 percent rate, currently this figure is at 2.6 percent, which confirms the growing confidence to the State Oil Company," Abdullayev said.

The placement of Eurobonds in London generated great interest among investors. The total volume of orders made by 290 investors totaled $ 4.6 billion.

Total volume of Eurobonds issue was $ 500 million. The maturity date of the primary issue of these Eurobonds is February 9, 2017. Eurobonds are issued on the basis of "Regulation S" of the U.S. Securities Act.

Most of the funds received by the State Oil Company of Azerbaijan (SOCAR) from the placement of Eurobonds were directed to pay the assets in Switzerland, purchased from Exxon Mobil. SOCAR signed an agreement with Exxon Mobil to acquire its Swiss branch - Esso Schweiz GmbH in November 2011.

Part of the funds from the placement of Eurobonds to the sum of $133 million, is intended for the purchase of 10 per cent of the state share of the Petkim petrochemical holding.
SOCAR is the co-owner of the Petkim petrochemical complex. Previously SOCAR Turkey Enerji (Turkish division of the State Oil Company of Azerbaijan) started construction of a new oil refinery in Turkey in order to meet the needs of Petkim in raw materials.

The rest of the proceeds from the Eurobonds worth $166 million focused on the external debt of the company, a senior representative of SOCAR said. In particular, $133 million were used to repay the loan borrowed from BNP Paribas and $33 million to cover the loan from the Yapi Kredit Bank.