OREANDA-NEWS. June 19, 2007. JP Morgan and Citigroup have become lead managers of the tender announced in March by the International Bank of Azerbaijan (IBA) for the issue and placement of Eurobonds in the volume of US$200 million, reported the press-centre of IBA.

As it is reported by Day.Az, this information has been given to journalists by Vagif Akbarov, the deputy chairman of the board of IBA. “In October 2006 the Managing Board of IBA made a decision on the inaugural issue of Eurobonds and the tender to select the lead managers was held”, he said.

They were selected according to such parameters as the optimal marketing strategy of the forthcoming issue, evaluation of anticipated yield, the proposed investor base, experience in lead management, securing liquidity on the secondary market and etc. According to him, the expected term of transaction is October – beginning of November 2007, while the maturity is 3-5 years. The borrowed funds will be used for financing of priority project in the various sectors of economy, from the oil to non-oil sector and up to the mortgage.

For the interesting projects, the placement may be carried out via Luxembourg or London stock exchange, however, the choice of stock exchange will depend upon the advice of lead managers. The lead managers are currently finalizing the wording of IBA's mandatory letter, the signing of which is planned to take place within a week.

Following which will start the process of engaging the international and local lawyers, approval and distribution of the list of participants and the schedule of transaction. With regards to the rates, the deputy chairman of IBA said that the difference between the government Eurobonds and the Eurobonds of the bank will constitute 0.5-0.8 percent.

“We would greatly prefer that the government sovereign Eurobonds were issued before ours, so that there would be a kind of benchmark for investors”, Akbarov said. In the event of delay in the issue of sovereign Eurobonds, then the IBA’s securities will be taken as a guide and will be higher that the sovereign securities within the range of 0.5-0.8 percent, since, as a rule, the value of economic agents’ Eurobonds exceed the value of sovereign ones.