Successful debut of Government Securities on the world market

The Working Group of the Republic of Tajikistan consisting of representatives of the Executive Office of the President of the Republic of Tajikistan, National Bank of Tajikistan, Ministry of Finance of the Republic of Tajikistan and the Energy Projects Implementation Unit under the leadership of Mr. Jamoliddin Nuraliev, First Deputy Chairman of the NBT, from August 28 to September 8, 2017, with the assistance of Raiffeisenbank and Citibank investment banks, took part in a road show with major investors from the United States, England and Switzerland and successfully presented the production and sale of Government Securities in the amount of USD 500 million dollars to continue the construction of the Roghun hydropower plant.

During the visit, the Working Group of the Republic of Tajikistan held talks with more than 300 representatives of major investment companies such as Goldman Sachs (assets $ 1.3 trillion), Black Rock (assets $ 5.4 trillion) PIMCO (assets of USD 1.6 trillion), Morgan Stanley (assets of USD 420 billion), Fidelity (assets of USD 2.13 trillion), Wellington Management Group (assets of more than USD 1, 0 billion trillion), JP Morgan (assets - USD 1.7 trillion), etc.

Representatives of investment companies drew attention to a number of economic issues, including issues related to the country's basic macroeconomic indicators, economic growth trend, state budget deficit, level of external debt, state of the banking system, progress of work and financing plan for the Rogun HPP, implementation of the regional project of the transmission line KASA-1000, reforms in the field of energy, course of negotiations with IMF in the framework of the new program on economic reforms, diversification of international reserves management, transparency of financial reporting, as well as cooperation with international financial organizations and other issues of mutual interest.

In the final part of the meetings, on September 7, 2017, representatives of the Republic of Tajikistan, with the assistance of Raiffeisenbank and Citibank investment banks, have successfully represented Government Bonds of RT in the international financial market.

In world practice, the determination of the value of bonds (yield of the interest coupon) depends on the mechanism of the market economy, the country's rating and the IMF program. Judging by the rating of the Republic of Tajikistan, it was assumed that the yield of the interest coupon of the Government Bonds of Tajikistan will be at least 8% per annum.

During the meetings, as well as during the discussion of issues of interest, there was an opportunity to increase the interest of international investors in the economy of the Republic of Tajikistan. After the successful negotiations, investors' requests for the purchase of Government Bonds of Tajikistan increased to $ 4.5 billion and yield on coupons on bonds decreased from 8% to 7,125% per annum. As a result, Government Bonds worth $ 500 million entered international financial market.

It should be noted that the interest rate on coupons on Bonds of the Republic of Tajikistan for 10-year bonds rated "B" in 2016-2017 is one of the lowest. The reason for this is a 9-fold increase in requests for purchase of Government Bonds of the Republic of Tajikistan by 290 international investors, which indicates the trust of foreign investors in the successful completion of the construction of the Roghun HPP.

Government bonds of the Republic of Tajikistan by type of investors were sold to fund managers (85%), hedge funds (9%), banks and other financial institutions (6%). Geographically, the bonds were purchased by investors from the United States (38%), Great Britain (24%), EU countries (35) and Asia (3%).

Along with the acquisition of bonds, international investors also expressed their readiness to establish mutually beneficial cooperation with the Republic of Tajikistan, using other investment methods.

Definition of the state rating and successful debut of Government Securities (Eurobonds) on the world market are one of the significant events in the history of the formation of the national economy in 26 years of the country's independence, a sign of its integration into the world market.

The National Bank of Tajikistan expresses its gratitude to the investment banks Raiffeisenbank and Citibank, as well as Morgan Lewis & Bokius for their cooperation and assistance in the debut issue of the Government Bonds of the Republic of Tajikistan on the international capital market.

International Reserves Management
and Exchange Rate Policy Department
NBT