Bonds of Azerbaijan’s energy giant SOCAR, issued for the domestic market of the country enjoy high level of market uptake.
The demand for bonds, the nominal value of which is $1,000, has exceeded the supply twofold. Applications worth some $203,604 million were accepted by relevant institutes, while the total worth of obligations issued by SOCAR amounts to $100 million. The acceptance of applications for the purchase of bonds, with the interest rate of 5 percent was completed on October 10, 2016.
Applications were collected in cooperation with ASAN service, International Bank of Azerbaijan, Azer Turk Bank, Xalq Bank, Kapital Bank, Rabita Bank, AzFinance, InvestAz, Pasha Kapital и PSG Kapital, which perform the role of market makers. Distribution of applications will be held on October 12, while preference will be given to individuals.
Bonds may be obtained only by Azerbaijani citizens and local companies, while foreign individuals and legal entities have a right to buy bonds from their owners on the secondary market. The placement of bonds will be implemented on October 13. Operation on the secondary market will be launched on October 17, after approval of the Financial Market Supervisory Body (FMSB).
The issuance of bonds is considered to be a very important step for diversifying financing channels and creating investment opportunities for the population, as well as give an impetus to the development of the securities market in the country.
Among main advantages of SOCAR’s bonds is that their annual interest yield is higher than the rates applied in reference to dollar deposits placed in banks, where the annual interest rate on dollar deposits currently stands at 2.5-3 percent. Moreover, the company guarantees the liquidity of the issued securities and the possibility of selling them at any time. SOCAR also doesn’t exclude the possibility of issuing bonds in the country’s national currency – the manat in the future.