Lead managers of Tajikstan's debut US dollar bond to kick off US, Europe roadshow

Lead managers of Tajikstan's debut US dollar bond to kick off US, Europe roadshow
The Tajik president and his staff at The Palace of Nations in Dushanbe will keenly await news of how the country fares with its first US dollar bond.
By bne IntelliNews August 31, 2017

Joint lead managers of Tajikistan’s debut 10-year dollar-denominated eurobond, Citigroup and Raiffeisen Bank International, will kick off a roadshow across Europe and the US on August 31.

Tajikistan is preparing the benchmark offering “with no guarantee from any external organisation”, the Financial Times reported on August 29, citing an anonymous source. The report suggested the debut might take place as early as next week. Tajikistan is rated B- by S&P and B3 by Moody’s and both deem the country as having a stable outlook.

The pricing for the Tajik bond is expected to be guided by Belarus’ 10-year tranche at 7.625%. The bond is also expected to be at a volume of $500mn with a weighted average life of 8.75 years. The proceeds from the eurobond will go towards financing the construction of the Rogun hydropower dam.

“The sovereign is arranging a series of fixed income investor meetings,” Reuters reported on August 30.

Tajikistan’s foreign debt stood at $2.3bn in the first half of 2017, edging up from $2.28bn a year ago. On the other hand, the debt-to-GDP ratio stood at 35.8% in the period, slightly below the 35.9% recorded in January-June 2016.

The Tajik government has failed to lower the level of the country’s foreign debt below 17.3% of GDP in 2017 as planned. According to Tajikistan’s Strategy for Managing Government Debt programme, the country’s foreign debt must not rise above the threshold of 40% in debt-to-GDP.

Nearly half of Tajikistan’s GDP is reliant on migrant workers’ remittances from Russia. While official figures show relatively stable economic growth (6% in 1H17), the country has been facing problems with its ailing banking sector.