On May 21, new sovereign Eurobonds from Uzbekistan were issued on the global financial markets, totaling $1.5 billion, informed the Ministry of Economy and Finance of Uzbekistan, Gazeta.uz reports.
For the first time, Uzbekistan issued bonds in three currencies: 7-year Eurobonds in US dollars, 3-year bonds in euros to finance Sustainable Development Goals (SDGs), and bonds in the national currency.
Throughout the day, bids totaled $5.5 billion ($3 billion, 2 billion euros, and 4 trillion sums).
The coupon rate for
- the 7-year bonds of $600 million was 6.9%;t
- The ministry noted that the interest rate for three-year government securities issued on the domestic market of Uzbekistan is 17.9%.
- for the 3-year bonds of 600 million euros — 5.375%;
for the 3-year bonds of 3 trillion sums — 16.625%.
The proceeds from these international bonds will be used to cover the state budget deficit and finance the Sustainable Development Goals, the report says.
According to the ministry, a videoconference with 76 investors from the USA, UK, Germany, Denmark, and UAE was held on May 17, and meetings with 40 major investors were held on May 20-21.
Uzbek representatives informed about the macroeconomic situation and structural reforms as part of the "Uzbekistan - 2030" strategy.
"Despite the ongoing challenging global situation, international investors positively assessed the maintenance of macroeconomic stability in Uzbekistan, the acceleration of energy tariff reforms, privatization, and other practical structural reforms," the statement said.
In 2023, Uzbekistan's consolidated budget deficit reached a record 59 trillion sums (over $5 billion), far exceeding the figures of previous years. At the end of last year, the Uzbek government raised the limit through parliament as it failed to stay within the state expenditure limits.
Last year, the volume of subsidies from the state budget increased fivefold over two years, from 5.63 trillion to 29.25 trillion sums ($2.5 billion). 18 trillion sums accounted for covering the difference between the purchase and sale of gas, 1.72 trillion for compensating damage from thermal energy, and 1.02 trillion for geological exploration.
Expenditures for the maintenance of state administration bodies, justice, prosecution, courts, mahallas, and support for NGOs in Uzbekistan increased by 24.5% to 17 trillion sums, although the administrative reform planned to reduce state expenditures by 2.8 trillion sums.
In January-April, Uzbekistan's state budget deficit was 25.5 trillion sums (about $2 billion).
A Eurobond is a long-term debt security in a currency foreign to the issuer. Eurobonds are issued by international organizations, governments, and large corporations interested in obtaining funds for a long period - from 1 year to 40 years. After a certain time, a buyback is supposed to occur. Despite the prefix "euro" (the first such securities appeared in Europe), today they are issued in various markets in different currencies.
CentralasianLIGHT.org
May 22, 2024