Tomorrow SOCAR starts operation to subscribe to SOCAR bonds, which will be carried out up to and including 10 October 2016.
Previously, the Financial Markets Supervision House of Azerbaijan registered the prospectus of SOCAR five-year bonds for $100 million. The emission is divided into 100 thousand bonds with par value of $ 1 thousand per security.
The yield on the bonds is 5% per year.
Placement of the bonds is scheduled for 13-14 October at the Baku Stock Exchange.
For SOCAR this is the first placement of bonds on the domestic market. The company already has experience in issuing Eurobonds – in overseas markets three issues of bonds have been placed.
At the presentation devoted to the SOCAR bonds, the head of the company Rovnag Abdullayev said the purpose of the issue is the diversification of financing channels of the company and the creation of new investment opportunities for the population.
According to him, the securities at the initial offering will be possibly acquired only by the citizens of Azerbaijan and domestic companies.
‘There is the possibility of acquiring bonds by foreign natural and legal persons in the secondary market from their owners,’ said Abdullayev.
The head of SOCAR said part of the funds raised from the issuance of dollar bonds will be used to repay part of the foreign borrowings of the company.
The head of the Association of Banks of Azerbaijan, Zakir Nuriyev, said the high rate of interest on bonds (5%) will not cause outflow of deposits in foreign currency from banks.
‘These bonds are increasingly focused on attracting the funds, which are not in financial turnover. Banks today offer 2.5-3% per annum on dollar deposits. But despite the fact that bond yields are higher, their small amount will not cause outflow of deposits from banks. It will diversify the country’s financial market, the more the market needs the presence of different instruments now,’ Nuriyev told reporters.
SOCAR bonds can be purchased through the following banks: International Bank of Azerbaijan, Capital Bank, Rabita Bank, Khalg Bank, Az Finance, Invest Az, Pasha Capital, Capital ASC, as well as through the centers of ASAN №1 and 5 in Baku.