YEREVAN, September 20. / ARKA /. Head of an Armenian think-tank says the decision of the government to issue USD-denominated eurobonds could have been motivated partly by the need to subsidize the higher price of natural gas that became effective from July 7.
Armenia issued the first eurobonds on Thursday setting the final yield of 6%. The maturity period is seven years. The bonds were expected to price later on Thursday via Deutsche Bank, HSBC and JP Morgan.
In an interview with ARKA, Tatul Manaserian, head of Alternative think-tank, suggested that the government may use part of the proceeds from the placement of bonds to subsidize the higher natural gas price, especially that the rise of the price and the government’s decision to issue Eurobonds actually coincided.
According to Manaserian , in contrast to external borrowing, which are available on certain conditions and must be channeled into specified areas, in the case of domestic debt it is the government that decides on what to spend the proceeds. -0-