April 12, 2021, the deadline for repayment of 10-year Eurobonds in the amount
of $ 500 million expires.
bonds were placed on the international market in 2011, with the aim of
refinancing bonds taken by the government in 2008. the time has come for covering
this debt that will be refinanced with new bonds.
February 26, 2021, the Ministry of Finance instructed investment banks to start
issuing Eurobonds. To sell them, 10 international investment banks and funds
were selected, including leaders of the global stock market as JP Morgan,
Goldman Sachs and ICBC.
Ministry of Finance also intends to put the bonds up for sale on the domestic
market and involve Georgian investment companies Galt & Taggart and TBC
this stage, work is underway to place bonds on international stock exchanges
and, according to available unofficial data, a special statement will be made
in the coming days.
bonds are issued for a period of 10 years, but this is only preliminary data -
the final parameters depend on the market situation and the demand among
potential clients. The maturity of the bonds can be less than 10 years.
the interest rate will also be
significantly lower than it was in 2008 and 2011.
Chachanidze, Managing Director at Galt & Taggart, says that according to
preliminary calculations, the interest rate on bonds will be 4% per year, but
this is not a final decision yet.
to the opposition member, ex-president of the National Bank of Georgia Roman
Gotsiridze, work on the issue of new Eurobonds began with a delay, and most
likely the Ministry of Finance will not have time to take out the securities in
time, to get a yield,
and fulfill obligations to investors in a timely manner.
ex-official believes that in the current situation the government will have no
choice but to cover the 500 million debt from the central bank’s reserves.
“This will significantly cut the currency reserves of the
National Bank against the backdrop when the
external debt has reached a historical maximum. The regulator tries to avoid
foreign exchange interventions to keep the national currency rate, but now it
will have to spend 500 million to pay off debt on Eurobonds. The foreign
exchange reserves that have been accumulating over the years will be cut by $
500 million in just a couple of days, ”Roman Gotsiridze says.