Published: August 24, 2020
Azerbaijani chemical company Socar Polymer printed a market-record size dollar bond on the domestic market over the summer, with bankers on the ground in the country now looking to attract international money.
Socar Polymer, a subsidiary of the Azerbaijan state oil company Socar and the first oil and gas sector public private partnership in the country, printed a US$200mn 5% 2025 bond on July 9.
The trade was underwritten by GPB Financial Services, PASHA Capital and PSG Capital, with PASHA and PSG structuring the deal and communicating with local banks, and GBP Financial Services marketing the deal internationally.
The success of the trade means that the clamour for capital markets access among Azerbaijani borrowers is growing.
“The volume of transactions completed over the past 12-18 months has demonstrated an increase in issuers’ interest in diversifying funding sources and raising debt on capital markets by issuing bonds,” Taleh Kazimov, chief executive officer and chairman of PASHA Bank, told EMEA Finance. “Despite the fact that the local bond market is still relatively young, this transaction confirms the significant potential prospects for its further growth in the midterm.”
It is not only issuers that are paying more attention to the capital markets, with investor interest also rising domestically. A total of seven Azerbaijani financial institutions bought the debt. These were International Bank of Azerbaijan, Xalq Bank, Kapitral Bank, Bank Respublika, Rabita Bank, Ziraat Bank and Bank of Baku.
The spectrum of Azerbaijani investors showing interest in capital market deals vary.
“We are talking about our domestic market players, both institutional investors and individuals, as well as banks, insurance companies and other legal entities,” said Kazimov. “In addition to international investors, the country's local financial institutions are now actively participating in deal making.”