Tashkent, Uzbekistan (UzDaily.uz) — Trading in foreign-currency-denominated bonds began on the Republican Stock Exchange “Toshkent” on 28 September. The exchange’s quotation list includes bond issues by Asia Alliance Bank and Universalbank with a combined value of US$30 million, the exchange’s press service reported.
Asia Alliance Bank registered Uzbekistan’s first issue of foreign-currency corporate bonds on 10 September. The bank will issue 200,000 bonds with a nominal value of US$100 each.
The securities trade on the exchange under the ticker AAB1B3U. Their maturity is 1,095 days, or three years. The coupon rate is set at 7% per year, with payments made quarterly.
Universalbank placed 100,000 foreign-currency bonds with a nominal value of US$100 each. They are listed on the exchange under the ticker UNVB1B2U.
The Universalbank bonds carry a coupon rate of 8.5% per year, with income paid once a quarter. Their maturity is 730 days, or two years.
The new instruments entered the market after the National Agency of Prospective Projects approved regulations on the circulation of foreign-currency bonds in April. The document establishes rules for the issuance, placement, trading and redemption of foreign-currency-denominated bonds within a regulatory sandbox on the capital market.
Under the regulations, the total amount of foreign-currency bonds outstanding for a single company may not exceed US$50 million. Unsecured bonds may be issued within the issuer’s equity capital.
If the issue exceeds the amount of the issuer’s equity capital, the company, except for certain banks with high credit ratings, must provide collateral for the amount exceeding the established threshold.
Collateral may include real estate, cash, bank guarantees and insurance policies.
Real estate must first be valued at market value. It may be accepted as collateral for no more than 75% of the assessed value of the issue, while its share in the total amount of collateral may not exceed 50%.
The regulations also provide for financial covenants for foreign-currency bond issuers and establish requirements for individuals purchasing such securities through the banking system.
