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Tajikistan to Issue $1 bln Bounds on the International Market

Wednesday 21 June 2017

DUSHANBE (Avesta news agency) — The Majlisi Namoyandagon (lower house of parliament) of Tajikistan today approved the government’s proposal to issue government bounds for a total of $1 bln on international financial markets. "to issue government securities for circulation on international financial markets"

Speaking on this issue, Deputy Minister of Finance Jamshed Nurmahmadian noted the aim is attracting financial resources for the implementation of the strategic project of the Rogun HPP:

Thus, valuable government securities of the Republic of Tatarstan will be sold on international financial exchanges. Six months ago, a special working group was established that negotiated with international financial institutions, rating companies, securities sales agencies and legal services agencies.

At the first stage, the securities will be issued for the amount of $500 mln:

We have already agreed with the rating company Moody’s Investors Service Modis, at least we should get the conclusion of two rating companies on the financial condition, GDP volume and other criteria. The second such company with which negotiations are being conducted is SNP rating company.

According to Nurmahmadiene, an agreement was reached with one of the companies on the issue of placement and sale of securities. The sale of government securities, should be established in 2018:

Profit of companies and individuals who will buy these securities will be at the level of 7.5-8%.

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Regarding the risks that may arise in the process of selling government securities, the deputy of the Majlisi Namoyandagon Sharif Rahimzoda noted that they (risks) exist, but, given Rogun’s strategic importance, it needs to be realized. “The size of the external debt may increase — this is one of the risks”, Sh. Rahimzoda stressed.

J. Nurmahmadian, in turn, explained that we have a threshold, that is, the amount of external debt should not exceed 40% of GDP. At present, this figure is 35% of GDP: “This year, we allocated $165 mln to service external debt. In 2018, the amount of external debt may increase and amount to 39.4% of GDP.”

Answering the question where exactly will the government securities will be sold, the Deputy Minister of Finance noted that they will be sold in the international financial markets of the United States under the relevant US legislation.

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