THREE REASONS FOR ISSUANCE OF EUROBONDS BY MINISTER OF FINANCE
The government will repay the Russian loan of 500 million dollars
on one of the upcoming days. Armenia has already repaid 43.5 million
dollars over the past year.
During the press conference following the session of government the
minister of finance Davit Sargsyan told reporters that the money
from the allocation of Armenia’s Eurobonds has been transferred to
the government’s account. The government will use this sum to repay
fully the Russian loan. The government will spend part of the money
on the development of SMEs. The minister said he disagrees that the
Russian loan had been wasted. “All that money is in its right place.”
In answer to the question why Armenia went for early repayment of the
Russian loan, Davit Sargsyan answered that interests on Russian loan
cannot be compared to interest on Eurobonds. He noted that Russian
loan was borrowed at Libor plus 3%. It is a floating rate which does
not compare to fixed rate.
“Our Eurobonds are a little more lucrative than the Russian loan,”
he said.
Davit Sargsyan said the Armenian government spoke about early repayment
of the Russian loan this May, and the last installment was signed
on September 24. “September 3 did not affect our decision on how to
spend the money from the bonds,” he said.
According to the minister of finance, Armenia issued Eurobonds for
several reasons. Armenia is a middle-income country now, which means
that MDBs will lend money at far less soft conditions. Second, the
private sector needs financing and business development. Davit Sargsyan
says it is either impossible for the private sector to get assets or
interest rates are very high unless the government interferes. Third,
issuance of bonds means diversification of the country’s financing. So
far Armenia has been dependent on MDBs or countries but this step
will diversify our means because the private sector participates in
the process.
17:11 03/10/2013 Story from Lragir.am News:
From: Emil Lazarian | Ararat NewsPress
Disclaimer: This article was contributed and translated into English by Emil Lazarian. While we strive for quality, the views and accuracy of the content remain the responsibility of the contributor. Please verify all facts independently before reposting or citing.
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