FIRST BENCHMARKING BONDS IN ARMENIA TO BE ISSUED BY FINANCE MINISTRY

ARKA News Agency
Feb 1 2008
Armenia

YEREVAN, January 31. /ARKA/. Armenia's Ministry of Finance and Economy
announced about the upcoming placements of the first benchmarking
mid-term and long-term government (treasury) coupon bonds.

The first tranche of three-year bonds of AMGN36052110 series for
total of 3.5bln Drams is to be placed on February 5, the Press Service
of the Central Bank of Armenia reported. Five-year government bonds
of AMGN60052135 series for 3bln Drams are to be issued on February
12. The total volume of the expected placement is to make 20bln Drams
(annual coupon yield set at 7.5%) and 30bln Drams (8.5% annual yield)
respectively.

The Ministry of Finance also reported the expected placement of
long-term government bonds on February 7 (AMGB10072186 series with
redemption period of 10 years) and on February 14 (AMGB20072283
series, 20-year redemption period) for 3.5bln Drams and 4bln Drams
respectively. The total volume of the first expected placement is to
make 50bln Drams (10% annual coupon yield) and total volume of the
second series to be placed - 80bln Drams (11% annual yield). For
mid-term bonds redemption dates are 05.02.11 and 05.02.13, for
long-term bonds redemption is scheduled for 07.02.18 and 07.02.28
respectively.

Coupon payments for all bonds are to be made once every half a year.

The minimum demand volume is set at 10,000 with one step being
1,000Drams multiplied by the number of coupons in circulation.

The peculiar feature of benchmarking bonds is that during the
primary placement only agency can take part in auctions and the
tranches on placement of bonds can be effected by the final date of
the redemption. The secondary issue can be effected on both stock
market and off-floor market. The secondary circulation of the new
sort of bonds is expected to promote intensification of auctions in
the Armenian Stock Exchange.

Currently the following five Armenian banks are agents allowed to
participate in primary placement of government (treasury) bonds -
Conversebank, Ardshininvestbank, Araratbank, Armswissbank and HSBC
Bank Armenia. ($1=306.84Drams).