Tag Archives: sovereign debt

Russia writes off Kyrgyz debt

BISHKEK, FEB. 6 2018 (The Conway Bulletin) — Russian President Vladimir Putin wrote off $240m of debt that Kyrgyzstan owed to Russia. The debt write-off had been expected as it was agreed during a trip to Moscow last year by former Kyrgyz president Almazbek Atambayev. Since 2013, Russia has written off Kyrgyz debt worth $500m. The debt write-offs underline just how influential Russia is over Central Asia and its various economies.

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— This story was first published on Feb. 6 2018 in issue 360 of The Conway Bulletin

Azerbaijan’s ratings upgraded

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FEB. 3 (The Conway Bulletin) – Fitch the ratings agency upgraded Azerbaijan’s credit outlook to ‘stable’ from ‘negative’ because it said that oil prices had stabilised and that the country’s macroeconomic picture had improved. Importantly it also said that it expected Azerbaijan’s currency to remain broadly unchanged over the next few years.

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>>This story was first published in issue 360 of The Conway Bulletin

Kazakhstan says it will issue an Islamic bond next year

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SEPT. 17 (The Bulletin) — Kazakhstan will issue an Islamic sovereign bond, or sukuk, next year, media quoted President Nursultan Nazarbayev as saying. He said that the sukuk would be worth $300m. Kazakhstan has been talking up the prospect of issuing another sukuk for years. It issued its first one, worth $57m, in 2012.

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— This story was first published in issue 344 of The Conway Bulletin, now called the Central Asia & South Caucasus Bulletin, on Sept. 24 2017.

— Copyright the Central Asia & South Caucasus Bulletin 2017

Investors snap up first Tajik sovereign debt issue

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DUSHANBE, SEPT. 7 2017 (The Conway Bulletin) — Investors snapped up Tajikistan’s first sovereign bond issue, surprising Central Asia analysts who said the auction came with huge risk.

The $500m Eurobond issue came with a coupon of 7.125%, which analysts said was around 200 basis points more than the price paid by other frontier economies for debt. It is set to mature in 2027.

Tajikistan, considered the poorest of the Central Asian countries with an economy reliant on remittances, has said it wants to raise the cash to pay for construction of the giant Rogun Dam.
Lutz Roehmeyer, director at Landesbank Berlin Investment, invested in some of the debt.

“They don’t want to splash out the money on any nonsense, they want to build a dam and produce electricity which would be a massive boost for the local economy,” he was quoted by Reuters as saying. The Rogun dam is part of a wider project to supply electricity generated by hydroelectric power to Afghanistan and Pakistan.

Tajikistan has a reputation for corruption and analysts warned that investing in Tajikistan was a gamble. Last year, the government bailed out its commercial banks.

Max Lambertson of the EIU said yields on investment grade debt around the world were currently so poor that investors were looking at far riskier options to find profit.

“Investors typically show little interest in Tajikistan, which has a poor record with foreign investors and multilaterals,” he said.

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— This story was first published in issue 343 of The Conway Bulletin on Sept. 15 2017

Tajikistan to launch first sovereign debt issue

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DUSHANBE, AUG. 30 2017 (The Conway Bulletin) — Brushing aside a worsening banking crisis, Tajikistan said that it was going to launch its first ever sovereign bond .

Commentators said that the Eurobond could be issued at the start of September and have a lifespan of around nine years, although they did not give a coupon value. The cash raised in the Eurobond would go towards funding the construction of the Rogun Dam, one of the biggest hydropower projects in the world.

It will also make Tajikistan the second country in Central Asia, after Kazakhstan, to issue sovereign debt, giving Western investors increased exposure to the region.

Media later said that Tajikistan was aiming to raise $500m through the Eurobond that was likely to have a coupon of around 7.625%.

Shortly after the announcement, ratings agency Moodys, which has Tajikistan at the “highly speculative” investment grade of B3, warned potential investors of the risks involved in a Tajik investment. It said that Tajikistan’s banks were under increased pressure.

“The issuer rating also incorporates the credit challenges posed by institutions that are weak on a global scale, although progress on financial reforms and macroeconomic stability indicate some improvements,” it said.

Over the past 15 months, the Tajik government has rolled out a bailout plan to stop banks from going bankrupt.

The Central Asia region has been recovering from a prolonged economic downturn linked to a recession in Russia and a collapse in oil prices from mid-2014.

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(News report from Issue No. 342, published on Sept. 7 2017)

Russia cancels Kyrgyzstan’s debt

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MAY 4 2017 (The Conway Bulletin) — Russia cancelled a $240m debt owed by Kyrgyzstan which had been due to be paid off by 2025. The statement from the office of Russian PM Dmitry Medvedev said that the loan had been given to Kyrgyzstan on Sept. 20 2012. The statement did not say why Russia had decided to wipe off the debt but it has previously handed out soft loans and cancelled debt in return for political favours.

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(News report from Issue No. 327, published on May 5 2017)

Armenia to issue second bond

NOV. 18 2016 (The Conway Bulletin) — Armenia plans to issue its second ever eurobond by 2019 or 2020, finance minister Arshaluys Margaryan told Reuters. Mr Margaryan did not specify the size of the eurobond. Armenia issued its first eurobond in 2013. It was dubbed the Kardashian bond, after Armenian- American actress Kim Kardashian, and was valued at $700m.

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(News report from Issue No. 306, published on Nov. 25 2016)

Azerbaijan readying a 2nd Eurobond

JUNE 1 2016 (The Conway Bulletin) — Azerbaijan’s state-owned Southern Gas Corridor company said it will issue a second $1b Eurobond by the end of 2016 or early next year, Bloomberg reported. The Southern Gas Corridor, which is in charge of a pipeline network that will connect Azerbaijan’s gas fields with European consumers by 2019, issued a $1b Eurobond in March. Sustained low oil prices have hit the financial feasibility of several large infrastructure projects across the region.

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(News report from Issue No. 283, published on June 3 2016)

Azerbaijan issues $1b Eurobond for gas pipelines

MARCH 24 2016 (The Conway Bulletin) – Azerbaijan’s finance ministry issued a $1b 10-year Eurobond to fund the Southern Gas Corridor company which is building an energy transport route between the Caspian Sea and Europe.

The initial yield on the debt was 7%.

Analysts have said that the rare debt issue for such a high-profile

Azerbaijani energy project is another indication of just how heavily the economic downturn has impacted finances.

The Southern Gas Corridor is a state-owned company in charge of the design and construction of pipelines that will send gas from the Caspian Sea to Europe by 2019. These include TANAP, which will run across Turkey and TAP, which will link Greece to Italy.

The EU considers the project to be a priority for its energy security strategy as it reduces its reliance on Russia for gas. Azerbaijan is hoping to give its gas sector a major lift with the EU as a key client.

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(News report from Issue No. 273, published on March 25 2016)

S&P downgrades Kazakhstan’s sovereign debt

FEB. 17 2016 (The Conway Bulletin) – Ratings agency Standard & Poor’s downgraded Kazakhstan’s sovereign debt ratings to BBB- from BBB because of the long-term low cost of oil. Standard & Poor’s also downgraded Saudi Arabia, Brazil, Bahrain and Oman at the same time. It said that oil accounted for 20% of Kazakhstan’s GDP.

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(News report from Issue No. 268, published on Feb. 19 2016)