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Finance ministry will soon issue more bonds for individuals, minister says

The finance ministry will soon issue two- and three-year bonds for individuals, considering the high demand for the bonds issued in December, Finance Minister Andrey Kharkavets told the magazine Finance, Accounting, Audit.

On December 20, 2012, the finance ministry started offering $10 million in $200 bonds and $40 million in $1000 bonds to individuals, Mr. Kharkavets said. The government bonds denominated in the US dollar have a seven-percent coupon and a maturity term of one year, he said.

The main reason the bonds were issued was to create an investment alternative for the population and expand the capacity of the internal financial market, Mr. Kharkavets said.

On January 30, 2013, the ministry started selling $50 million worth of $1000 bonds carrying a seven-percent coupon.

The government is to pay interest to the holders of the bonds in July 2013 and 2014 and January 2014 and 2015.

Mr. Kharkavets noted that the government had also raised $278 million through the sale of bonds to legal entities in the fourth quarter of 2012. Denominated in a foreign currency, the three- and four-year bonds have a coupon of seven to 7.5 percent.

Acquiring these bonds was more profitable than possible borrowing in external financial markets, Mr. Kharkavets said. “The finance ministry pursued a rather pragmatic goal, namely, finding resources to refinance external liabilities and substitute them for more advantageous ones,” he said. “We have succeeded, haven’t we? And this practice will continue. The capacity of the internal market allows us to do this.” //BelaPAN