Microfinance organization Agat Credit is preparing to become the first private issuer in Uzbekistan to place corporate bonds in foreign currency. The company's Board of Directors approved the parameters of the debut issue with a total volume of 10 million dollars. The nominal value of one security is set at an affordable level and will amount to 100 dollars.
Regulatory Conditions and Sandbox
This unprecedented step for the local financial market became possible thanks to the National Agency for Advanced Projects. The regulator officially included the microfinance organization in a special legal regime called the regulatory sandbox. This mechanism allows local resident companies to attract foreign currency capital of up to 50 million dollars.
Investor Terms and Yield
Investors are offered a fixed coupon income of 11.5% per annum with monthly interest payments. The entire circulation period of the debt securities is calculated at exactly 730 days, equivalent to two years. The investment company Freedom Broker acts as the underwriter, fully supporting the placement process and investor attraction.
Full Default Risk Insurance
To minimize investment risks, full insurance coverage from Kapital Sug'urta insurance company is provided. A special policy for 12.3 million dollars guarantees the return of funds in case of non-performance of obligations. The insurance amount is calculated with a margin and fully covers both the debt principal and coupon payments.
Placement Timeline and MFO's Previous Experience
Trading will commence on the 15th calendar day following the official publication of the state registration notice for the issue. It should be noted that this is already the sixth bond market entry for the MFO. The five previous rounds were successfully conducted in national currency with gradual yield decrease from 29% to 25% per annum.