BAKU, Azerbaijan, Nov, 26
By Fakhri Vakilov-Trend:
Uzbekistan’s Uzpromstroybank JSCB issued international bonds on the London Stock Exchange for the first time and thereby became a participant in the international capital market, Trend reports citing the press service of Uzbekistan’s Ministry of Finance.
Eurobonds worth $300 million were highly appreciated by investors, read the message.
Uzpromstroybank JSCB prepared for the issue of corporate Eurobonds based on the recommendations of such international investment banks as JP Morgan, Citigroup, Commerzbank and Raiffeisen Bank.
On November 18-22, representatives of the bank held meetings and negotiations with more than 60 investors in Zurich, Frankfurt and London. During the talks, current banking reforms in the country were discussed, including the government’s strategy to capitalize large commercial banks, the prospects for their privatization, credit policy, further changes in assets, including problematic ones, as well as the dynamics of the sphere's development.
“Large investors have taken into account the bank’s transformation process with the participation of the International Finance Corporation to improve corporate governance. Due to the fact that its business model is aimed at further commercialization and gradual privatization, they consider Uzpromstroybank JSCB as a commercial, not a state bank,” the ministry noted.
Following the advice of financial advisors and investor recommendations, on November 25 of this year, the bank’s initial yield on 5-year international bonds was set at 6.5 percent, and their placement was announced at 08:23 (London time). The volume of orders by 10:00 in the morning reached $300 million (fully covering the issue), and by 12:10 - $800 million (covering the issue 2.5 times).
At 12:25, bond yield was reduced by 0.125 percent, and a new rate was announced at 6.375 percent. Investors were satisfied with this strategy, and by 13:05 the volume of orders increased to $1 billion, and by 14:00- to $1.2 billion (with a 4-fold coverage of the issue). Due to such high demand, a sufficient profitability of the transaction was ensured, which was closed at 17:00 London time with a coupon rate of 5.75 percent.
The Ministry of Finance added that the first corporate Eurobonds in domestic history issued by Uzpromstroybank will serve as a guide for other commercial banks and enterprises.
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