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FOR FIRST TIME ARMENIA ISSUES BONDS WITH MATURITY OF 7 YEARS
YEREVAN, September 23 (Noyan Tapan). On September 23, Armenia for the
first time implemented successfully the distribution of government
bonds with maturity of 7 years. According to Arshaluys Margarian, Head
of the State Credit Management Department of the RA Ministry of
Finance and Economy, demand for these bonds exceeded almost 3 times
the volumes of the bonds issued, and the average yield made 9.2%,
which is lower than was expected by the government. Unlike bonds of
medium term maturity, which have been issued until now, these bonds do
not envisage partial payments before the deadline. On September 11
2004, new legal acts that regulate the government bonds market came
into force, according to which the RA Government, in addition to the
bonds of up to 5 years maturity that have been issued so far, will
also issue cupon bonds of 6-30 years maturity without partial
payments. Besides, short term maturity bonds, as well as medium term
maturity bonds with and without partial payments will continue to be
issued. The Department Head stated that it is planned to issue long
term bonds in November and December too. According to A. Margarian,
the issuing of long term bonds means the the RA Government step by
step consolidates its authority. THe new bonds will enable to lower
the domestic government debt and to extend its maturity term. As of
September 22, of the bonds worth 45.7 bln drams (about $89 mln) in
circulation, 13.0 bln or 29% are short term ones, and 32.7 bln or 71%
are of medium term maturity. As of September 22, the average term of
maturity of the domestic government debt made 556 days, and the
averaage yield - 9.9%. The RA government started issuing government
bonds in 1995 in order to finance the state budget deficit. Only short
term bonds (up to 1 year) were issued before 2000, after which cupon
bonds with partial payments and of medium term maturity (1-5 years)
have also been issued. The first medium term maturity bond was issued
on March 7 2000, it had a 15-month duration and 28% yield. A.
Margaraian expressed hope that other financial organiations will enter
the government bonds market in 3-4 years and the "monopoly"of the
banks will disappear. According to her, it will also be possible in 2
years to take steps in the direction of replacing the external
government debt with the domestic one.
From: Emil Lazarian | Ararat NewsPress
YEREVAN, September 23 (Noyan Tapan). On September 23, Armenia for the
first time implemented successfully the distribution of government
bonds with maturity of 7 years. According to Arshaluys Margarian, Head
of the State Credit Management Department of the RA Ministry of
Finance and Economy, demand for these bonds exceeded almost 3 times
the volumes of the bonds issued, and the average yield made 9.2%,
which is lower than was expected by the government. Unlike bonds of
medium term maturity, which have been issued until now, these bonds do
not envisage partial payments before the deadline. On September 11
2004, new legal acts that regulate the government bonds market came
into force, according to which the RA Government, in addition to the
bonds of up to 5 years maturity that have been issued so far, will
also issue cupon bonds of 6-30 years maturity without partial
payments. Besides, short term maturity bonds, as well as medium term
maturity bonds with and without partial payments will continue to be
issued. The Department Head stated that it is planned to issue long
term bonds in November and December too. According to A. Margarian,
the issuing of long term bonds means the the RA Government step by
step consolidates its authority. THe new bonds will enable to lower
the domestic government debt and to extend its maturity term. As of
September 22, of the bonds worth 45.7 bln drams (about $89 mln) in
circulation, 13.0 bln or 29% are short term ones, and 32.7 bln or 71%
are of medium term maturity. As of September 22, the average term of
maturity of the domestic government debt made 556 days, and the
averaage yield - 9.9%. The RA government started issuing government
bonds in 1995 in order to finance the state budget deficit. Only short
term bonds (up to 1 year) were issued before 2000, after which cupon
bonds with partial payments and of medium term maturity (1-5 years)
have also been issued. The first medium term maturity bond was issued
on March 7 2000, it had a 15-month duration and 28% yield. A.
Margaraian expressed hope that other financial organiations will enter
the government bonds market in 3-4 years and the "monopoly"of the
banks will disappear. According to her, it will also be possible in 2
years to take steps in the direction of replacing the external
government debt with the domestic one.
From: Emil Lazarian | Ararat NewsPress