Investors highly rated 300 million USD worth international bond of JSCB “O`zsanoatqurilishbank” listed on the London Stock Exchange and traded on the international capital markets.

International capital markets play an important role in ensuring sustainable economic growth in the country and the extensive attraction of foreign investment projects into the country. Successful placement of 1 billion USD worth sovereign bonds of the Republic of Uzbekistan in the international capital markets for the first time in the history of our country in February this year opened up new opportunities for commercial banks and businesses in our country.

JSCB “O`zsanoatqurilishbank” carried out preparations for the issuance of corporate international bonds on the basis of recommendations of international investment banks (financial advisors) such as JP Morgan, Citigroup, Commerzbank, Raiffeisen Bank. On November 18-22 this year, meetings and negotiations were held with approximately 60 investors in Zurich, Frankfurt and London.

During the negotiations, investors were introduced to the ongoing banking reforms in the country, the government strategy for capitalization of large commercial banks by the Reconstruction and Development fund of the Republic of Uzbekistan and transfer of loans to the Reconstruction and Development fund of the Republic of Uzbekistan, the prospects for privatization of banks in Uzbekistan, projects at which the international bond funds will be directed, other ways of formation of the bank’s resource base, expected condition (state) of assets after the transformation, credit policy, information on dynamics of troubling assets.

It should be noted that large investors have considered the Bank’s transformation process (including the preparation for privatization) and participation of the International Finance Corporation and improvement of corporate governance a positive tendency.

Due to the fact that the Bank’s business model is aimed at further strengthening commercial activity and gradual privatization, JSCB “O`zsanoatqurilishbank” is considered by investors as a commercial bank, not a state-owned bank and was compared equal to “Moscow credit bank” of Russia (5-year 5.3% coupon), “TBC Bank” of Georgia (5-year 5.75% coupon) and “Akbank” (5-year 6%).

On November 25 this year, following the recommendations of financial advisers, the bank’s initial yield for 5-year international bonds was set at 6.50% and the transaction was announced at 08:23 London time. The volume of orders at 10:00 am was 300 million. USD (transaction fully covered) and 800mln USD at 12:10 (the transaction is fully covered 2.5 times).

At 12:25 pm the bond yield was reduced by 0.125% and the new rate was announced at 6.375%. Investors were pleased with this strategy and by 13:05 the volume of orders was 1 billion USD. At 2:00 pm, the book of orders was closed with 1.2 billion USD (the transaction is fully covered more than 4 times)

Due to this high demand, financial advisors were able to lower the profitability rate by 6%. The transaction was closed at 5:00 pm London time at 5.75% coupon rate.

This transaction testifies a positive attitude of international investors to the reforms in the Republic of Uzbekistan, particularly in the banking system. It is also the first time in the history of Uzbekistan that corporate international bonds issued by JSCB “O`zsanoatqurilishbank” serve as “benchmark” for other commercial banks and enterprises.

It is worth noting that today’s event is an explicit demonstration of the international community’s confidence in President Shavkat Mirziyoev’s economic reforms.

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