London Stock Exchange welcomes Uzbekistan's inaugural international sovereign bond issue

Following an extensive marketing exercise in New York, Boston and London, the Republic of Uzbekistan (acting through the Ministry of Finance of the Republic of Uzbekistan) successfully priced its inaugural US$1 billion dual-tranche bond offering on 13 February 2019. The 144A / Reg S offering was formed by a dual US$500mm 4.750% tranche due February 2024 and a US$500mm 5.375% due February 2029.

The strong orderbook response peaked in excess of ~ US$8.5bn, allowing the Republic to proceed with a firm price revision and launch the transaction at 4.750% and 5.375% yield for the 5-year and 10-year tranches respectively (down from initial price thoughts of 5.375% area and 6.000% area). 

The issue was heavily oversubscribed and well diversified, as final books stood at US$3.8bn, with around 150 institutional investor orders. In terms of geographical distribution, the 5- and 10-year tranches saw UK investors taking 39% and 32% respectively, whilst US investors had 23% and 31%, Continental European 32% and 27%; and Asian & MENA investors took the remaining 6% and 10% respectively.

By investor type, 75% and 78% of the allocations went to Asset Managers and Funds, 20% and 16% to Insurers, Pension Funds & Sovereign Wealth Funds; whilst Banks and Private Banks took 5% and 6% of the 2024 and 2029 bonds respectively.

The success of the debut Eurobond issue reflects investors’ confidence in Uzbekistan’s solid economic fundamentals, reforms progression and debt management strategy.

The key transaction achievements:

  • Inaugurated Uzbekistan’s presence in the Eurobond market with the landmark highly successful transaction
  • Strong investors support resulting in bold price revision and final pricing inside Uzbekistan’s higher rated peers
  • Establishment of a direct benchmark yield curve for future Eurobond issuances by Uzbekistan’s SOEs and other corporates and financial institutions
  • First CIS Sovereign bond offering in 2019

J.P. Morgan acted as Global Coordinator & Joint Bookrunner; Citi acted as Joint Bookrunner, Fiscal and Transfer Agent and Registrar; whilst Gazprombank acted as Joint Bookrunner. White & Case LLP and Centil Law Firm acted as the issuer's Legal Counsel and Linklaters LLP and Kinstellar acted as arrangers’ Legal Counsel.

Summary New Issue Terms

Issuer:

The Republic of Uzbekistan acting through the Ministry of Finance of the Republic of Uzbekistan

Ratings:

BB- (S&P), BB- (Fitch)

Global Coordinator

JP Morgan (B&D)

Joint Bookrunners:

Citigroup, Gazprombank and JP Morgan

Maturity Date:

20 February 2024

(5-year)

20 February 2029

(10-year)

Issue Amount:

US$500mm

US$500mm

Coupon:

4.750%

S/A

30/360

5.375%

S/A

30/360

Spread to Benchmark:

+222.1bps

+266.4bps

Re-offer Price:

100%

100%

Re-offer Yield:

4.750%

5.375%


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