Armenian government gives go ahead for debut Eurobond

By bne IntelliNews August 9, 2013

bne -

The Armenian government has approved plans to issue the country's first sovereign Eurobond, and has given the go ahead to the finance ministry to sign a contract with bankers.

At a meeting on August 8, the Armenian cabinet backed a proposal from Finance Minister Davit Sargsyan to sign a contract with Deutsche Bank, HSBC, and J.P. Morgan Securities. The trio has already been selected as chief underwriters for the issue, according to a statement published on the finance ministry's website.

Prime Minister Tigran Sargsyan announced in May that Yerevan planned to issue a $500m sovereign Eurobond by the end of this year. The government hopes that the debut bond will establish a benchmark to help private Armenian companies tap international capital markets at better rates.

The issue will also help Armenia find an alternative to development funding, with most international financial institutions no longer viewing it as a low income country. "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 on May 16.

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