World Bank’s IFC issues first Uzbek soum-denominated bond

World Bank’s IFC issues first Uzbek soum-denominated bond
the IFC issues first Uzbek soum-denominated bond / bne IntelliNews
By bne IntelliNews May 29, 2018

The International Finance Corporation (IFC) has reportedly issued the first ever Uzbek soum-denominated bond “on the international markets”, raising UZS80bn (€2.86mn) to expand lending for micro, small- and medium-enterprises in Uzbekistan, according to a May 28 report by state-run news agency UzDaily.

The deal arranged by ING Bank is aimed at listing the bond, dubbed “Samarkand”, on the London Stock Exchange (LSE), though the report was unclear as to whether the bond was already issued on the LSE or not. The proceeds from the bond will be used to support the country’s “leading private bank”, Hamkorbank, allowing the lender to boost long-term local currency financing as it enables businesses to grow, while avoiding foreign currency risks.

“The two-year bond was placed with European asset managers dedicated to emerging markets,” the report added.

“We were very pleased with the broad, global investor interest in IFC’s inaugural Uzbek Soum issue,” said Timur Ishmetov, first deputy chairman of the Central Bank of Uzbekistan. “Successful completion of the issuance is greatly expanding the investor base in Uzbek soum and will help raise the profile of the currency in international debt capital markets.“

Meanwhile, Uzbekistan is still awaiting the president’s greenlight for an international bond market debut that could be worth up to $1bn.

The last round of reporting, back in February, said that the country was targeting an issue of between $200mn and $300mn of Eurobonds in 2018  to create a benchmark for Uzbek corporate borrowers. The country has named Raiffeisen Bank International AG as a potential issuer for this year. The plan marks Uzbekistan out as the third Central Asian country to issue Eurobonds — the first to go ahead was oil-rich neighbour Kazakhstan, while Tajikistan made a $500mn debut last September, assisted by Raiffeisen.

However, as the appetite for emerging markets has started to cool off, Uzbekistan may not necessarily find itself amid the most favourable conditions for issuing debt.

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