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Armenia is planning to make its debut on the Eurobonds market this year, the prime minister said on May 16. The move sees Yerevan seeking to leverage the ongoing emerging markets bond rally as it's forced to replace development funding, which is drying up.

Prime Minister Tigran Sargsyan announced that a political decision to issue a Eurobond has already been made. A $500m bond is expected before the end of 2013. The PM told government officials that the Eurobond will establish a benchmark to help private Armenian companies tap international capital markets at better rates, News.am reported.

"This is a new page in our economic policy, and not only in the management of public finances. We create opportunity for the private sector to attract cheaper funds from the financial markets," Sargsyan said.

Finance Minister Davit Sargsyan told the cabinet meeting that as international financial institutions no longer consider Armenia a low-income country, the flow of preferential loans and other development funding is expected to gradually dry up. As a result, Armenia needs to find its own sources of finance, he said. "This means the issuance of Eurobonds should start," he insisted.

The issue will also enable Yerevan to pay back loans from Russia, Armenia Today reports. The government says it is planning to employ Cleary Gottlieb Steen & Hamilton LLC to advise on the issue and provide technical assistance.