A senior official from the International Monetary Fund (IMF) on Tuesday welcomed the first-ever sale of Armenian Eurobonds that netted the government $700 million.
“This is a very welcome development. This is a serious success for Armenia,” Teresa Daban Sanchez, the new head of the IMF’s office in Yerevan, told RFE/RL’s Armenian service (Azatutyun.am) in an interview.
Daban Sanchez said strong demand for the 7-year dollar-denominated bonds testifies to investors’ confidence in Armenia’s government and financial system. “But it also carries a lot of responsibility and that is why we are here to help the authorities,” she said.
The Eurobonds were sold on international markets on September 19 at a relatively high yield of at least 6 percent, reflecting Armenia’s “junk” credit ratings assigned by agencies like Moody’s and Fitch. The authorities in Yerevan have borrowed funds from the IMF and other multilateral institutions at much lower rates.
The Armenian government has yet to clarify how it plans to spend proceeds from the sale that will considerably increase the country’s foreign debt. Reports in the Armenian press have said that the key purpose of the Eurobond issue is to repay a $500 million loan that was allocated to Armenia by Russia in June 2009.