Armenia to repay Russian $500 million loan ahead of schedule

03.10.2013 16:21
Armenia to repay Russian $500 million loan ahead of schedule

YEREVAN, October 3. / ARKA /. The Armenian government has decided today to use $450 million of the first-ever sale of Armenian Eurobonds that netted it $700 million, to repay a $500 million Russian loan that was allocated to Armenia by Russia in June 2009 for alleviating severe consequences of a global economic crisis for the Armenian economy. The loan is repayable in 15 years, but the government said today it will repay it ahead of schedule.

The government has already repaid $50 million of that loan, the ministry of finance said. The Russian loan was provided at a discount rate of LIBOR plus 3%.

According to Finance Minister David Sargsyan, on September 30, all the $700 million raised from the sale of bonds were transferred to the government’s account.

The Eurobonds were sold on international markets on September 19 at a relatively high yield of at least 6 percent, reflecting Armenia’s “junk” credit ratings assigned by agencies like Moody’s and Fitch. The Armenian finance ministry described the sale as a huge success, saying that investors were ready to buy as much as $3 billion worth of Armenian external bonds. The underwriters are Deutsche Bank AG, HSBC Bank plc and JPMorgan Securities plc. -0-

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