UK investors buy majority of Uzbekistan’s debut Eurobonds

Finance Materials 14 February 2019 22:26 (UTC +04:00)

Baku, Azerbaijan, Feb. 14

By Fakhri Vakilov – Trend:

Uzbekistan has posted for the first time in its history two tranches of Eurobonds with a combined value of $1 billion, Trend reports with reference to the Uzbek Ministry of Finance.

The yield of 5-year securities in the amount of $500 million will be 4.75 percent per annum, and the yield of 10-year securities in the amount of $500 million will be 5.375 percent.

The maturity dates of the bonds are set for 2024 and 2029.

Investor demand exceeded the placement almost four times and reached $3.8 billion from about 150 institutional investors. This made it possible to lower the yield benchmarks from 5.625–5.75 percent and 6 per annum to 4.75 percent and 5.375 percent per annum, respectively.

Most of the 5-year and 10-year bonds were bought by investors from the UK - 39 and 32 percent, respectively, while American investors bought 23 and 31 percent, continental European investors bought 32 and 27 percent, Asia, the Middle East and North Africa investors bought 6 and 10 percent.

The main buyers of Eurobonds were fund managers - 75 and 78 percent, insurance companies and pension funds - 20 and 16 percent, while banks and private banks bought 5 and 6 percent.

“The success of the debut issue of Eurobonds reflects investors’ confidence in the solid economic foundations of Uzbekistan, the progress of reforms and the debt management strategy,” the London Stock Exchange said.

Bloomberg noted that the debut placement of Eurobonds opens up the economy of Uzbekistan for foreign investments after more than two decades of isolation.

Also, the Minister of Finance Jamshid Kuchkarov said Uzbekistan is planning another Eurobond placement in 2020.

Uzbekistan held meetings with investors in New York, Boston and London on the placement of Eurobonds from February 7 to 12.

The placement was organized by J.P. Morgan, Citi and Gazprombank.


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