Azerbaijan will offer fixed coupon rate for government bonds after a long period

Baku. 28 February. REPORT.AZ/ Today Ministry of Finance will arrange auction in Baku Stock Exchange (BSE) for issue of 100 thousand mid-term government bonds (GB) at par value 100 AZN (10 mln AZN in total) for 2-year term.

Report informs referring to BSE, fixed coupon rate will be offered for state securities first time after a long period. Such as, Ministry of Finance this time seeks to realize 2-year bonds with fixed 15% annual income rate. Since 2014 income rates of GB have been determined based on demands from investors.

Jafar Ibrahimli, analyst of “Capital Management” investment company believes that offer of fixed income to investors for mid-term GB by Ministry of Finance has been stipulated by ministry’s assumption on upcoming stabilization of Azerbaijani manat and its desire to reduce costs of government debts: “Up until now investors have been determining income rate of GB through auctions, which changed between 16-20%. Now the ministry doesn’t want to promise profitability above 15%, in other words higher than interest rate set by Central Bank and enters the market with fixed rate. Nevertheless, it is not excluded that the circumstances may change during bids and annual rates will decrease or increase based on demands of investors”.