Araratbank issues 40,000 nominal coupon bonds worth 400 million drams

08.07.2016 17:00
Araratbank issues 40,000 nominal coupon bonds worth 400 million drams

YEREVAN, July 8. /ARKA/. Armenian Araratbank has issued 40,000 nominal non-documentary coupon bonds worth 400 million drams, the bank's deputy board chairman Davit Harutyunyan said today. He said this is the 12th issuance of bonds by the bank. The face value of a bond is 10,000 drams. The maturity period is 24 months and the annual interest rate is 13%. Harutyunyan said subscription to  the bonds will take place from 11 to 22 July.

According to Harutyunyan, the interest rate does not differ from market rates. ‘If we take two-year government bonds, their rate is 12-12.5%. We offer additional 0.5-1% premium for commercial bonds," he said.

According to Harutyunyan, the funds raised from the sale of bonds will allow the bank to offer lending at 14-15% rate.

"Apart from buying and selling bonds market participants will be given the opportunity to conclude also repo transactions. The coupon payments will be made every quarter," he said, adding that the bonds will be listed at NASDAQ OMX Armenia stock exchange within days after the completion of subscription, and then a contract will be signed with a market maker to secure their liquidity.

"Everyone who buys a bond will have the opportunity to sell it at any time and receive the accrued interest. It is this that makes investments in bonds attractive as opposed to deposits," he said.

Harutyunyan added that the bank's bonds will be protected by the Deposit Insurance Fund.

In June, the bank issued and placed $1 million worth USD-denominated bonds. In 2016, some 82 transactions with Araratbank’s bonds have been effected worth $540,000 and another 12 transactions worth 22 million drams.

Bonds can be obtained by individuals or corporate companies at any branch or the head office of the bank.

Araratbank founded in 1991 is owned by Flash Company (64.25%), EBRD (25%) and RURAL IMPULSE FUND II SA SICAV SIF (10%). It joined NASDAQ OMX Armenia in 2009 January.

In the first quarter of 2016, the bank's assets stood at 130.6 billion drams (a decline of 1% since the beginning of the year; liabilities stood at 107.9 billion drams (a decline of 1.45%), total capital was worth 22.7 billion drams (up 1%) and profit for the first quarter was 176.7 million drams. -0-


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