14 November 2018

SOCAR bonds rise in price again

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The SOCAR bonds, country's best sellers issued by the State Oil Company of Azerbaijan (SOCAR), have seen an increase in price again. reports that investment company PSG Capital that the purchase price of a bond makes $1,022 and its sale price stands at $1,008.50.

The growth in price was caused by an increase in demand for bonds and approach to the next interest payment. Thus, as the number of people investing in SOCAR bonds grows, the prices are changing too.

Advantages such as the guarantee of purchase provided by SOCAR, high liquidity, the convenience of operations and doing of interest payments in accordance with the schedule prompted an increased interest in SOCAR bonds.

The transaction volume of the bonds on sale in the secondary market exceeded $160 million.

Though these securities are a new product, they hold the highest position on sale and purchase in the corporate bond market.

The share of SOCAR bonds, issued in September 2016, was 53% that year, 82% in 2017 and 91% in 2018.

Deputy Director of PSG Capital Nariman Yagublu said: "SOCAR bonds, issued for 5 years, have been in circulation for two years and are drawing a considerable interest. The bonds will expire in 2021. Our company receives a lot of questions about the issuance of bonds. As a result, we see quite a high demand for the new bonds."

Notably, the REPO operations on SOCAR bonds were launched in November 2017. The REPO operations allow the SOCAR bondholders to borrow a loan on favorable terms by pledging their bonds on the Baku Stock Exchange. The volume of REPO operations so far has amounted to $28 million.

In addition, the holders of SOCAR bonds, by pledging their bonds in authorized banks, can also borrow AZN 1 million in a preferential loan for 24 months with the annual interest rate of 15-16%. The investors do not lose the annual income in USD from the bonds and the loan interest actually declines to 9-10%.

The term of circulation of the SOCAR bonds is 5 years, their annual income is 5% and the interest payment is once in three months.

The date of the interest payment on the next and the current year is October 17.

2018.09.12 / 16:13
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