EBRD to Issue AMD 5 Billion Floating-Rate Bonds in Armenia
Yerevan, July 3 – The European Bank for Reconstruction and Development (EBRD) is set to issue AMD 5 billion worth of floating-rate bonds in the Armenian capital market. This marks another significant investment initiative by the EBRD, aimed at fostering the development of local currency financial instruments, expanding financing opportunities, and deepening Armenia’s financial market.
Bond Placement Details
The placement is scheduled for July 7 at the Armenian Stock Exchange (AMX) through an auction. Converse Bank, a leading player in Armenia’s capital market, will act as the underwriter for this issuance. Converse Bank has a strong track record of underwriting several corporate bond placements in recent years.
“The placement of EBRD’s dram bonds is another important project for the bank, highlighting its expertise and specialization in organizing capital market transactions and investment solutions,” stated a press release from Converse Bank.
Key Features of the Bonds
The bonds will have a maturity period of 36 months, with a floating coupon rate. This rate will be linked to the yield of 6-month Armenian government bonds and will be reviewed every six months. This mechanism ensures a market-consistent yield and allows investors to benefit from changes in the interest rate environment.
“The issuance of dram bonds by the EBRD is of great importance for Armenia’s financial system. Such instruments contribute to the development of the dram capital market, the formation of long-term financing sources, and the expansion of international financial institutions’ participation in the local market. At the same time, they offer investors a highly-rated issuer’s security with a market-consistent yield,” the statement further added.
Post-Placement Plans and Market Impact
Following the placement, the bonds are expected to be listed on AMX. Additionally, necessary procedures will be initiated to enable their use in repo transactions by the Central Bank of Armenia. This move is anticipated to significantly enhance the liquidity and investment appeal of the bonds in the secondary market.
Participation in the auction is open through investment service providers that are members of the Armenian Stock Exchange.
Broader Context of Capital Market Development
This issuance is part of a broader strategy to strengthen Armenia’s financial infrastructure and attract foreign investment. The EBRD’s continued involvement underscores its commitment to supporting economic development and financial stability in the region. By providing diverse financial instruments, the EBRD aims to create a more robust and resilient capital market in Armenia.
The floating-rate mechanism offers flexibility for investors, adapting to market dynamics and potentially providing attractive returns. This approach also helps mitigate interest rate risks, making the bonds appealing to a wider range of institutional and individual investors.
The collaboration between the EBRD and Converse Bank highlights the growing sophistication of Armenia’s financial sector and its ability to host complex financial transactions involving international partners. This partnership is expected to set a precedent for future collaborations and further stimulate the growth of the local capital market.
For additional information, interested parties can contact:
- +374 10 511 211
- [email protected]
- [email protected]
Converse Bank is supervised by the Central Bank of Armenia.
