By Kamila Aliyeva
The Southern Gas Corridor Company, issuer of 10-year Eurobonds in the amount of $1 billion with a yield of 7% per annum (with a coupon rate - 6.875) on the international market in March 2016, has placed a second emission of $1 billion bonds in accordance with requirements of 144a/RegS.
Placement of bonds with a yield of 5.8% per annum, which is lower than the first emission yield, proves a confidence of capital markets in Azerbaijan and the SGC company, Trend reported with reference to the company. The bonds supported with a government guarantee.
The SGC Company represents interests of Azerbaijan in the Southern Gas Corridor (SGC) project designed to supply natural gas from Azerbaijan to Europe and supported by the European Union.
The additional emission raised total amount of international bonds with a maturity until 2026 up to $2 billion. Thus, this emission is considered to be largest in the country at present.
“Most of the bonds - 45% was purchased by U.S. investors, 40% - United Kingdom, 13% - other European countries, 2% - Asian and Middle East countries. Subscriptions to the bonds exceeded expectations, 90% of applications were submitted by fund managers, which contributed to their diversified distribution among leading institutional investors,” the company reported.
This is the second successful Eurobonds emission by the SGC Company on international capital markets over past 12 months. Successful issue of international bonds is a clear example of confidence of foreign investors in Azerbaijan's strong economy and development of transport infrastructure for one of the world's largest gas fields, according to the company.
Syndicate of banks Citi Bank, UniCredit, JP Morgan is authorized to place bonds placed by the issuer on international financial markets. Lazard Freres SAS acts as a financial adviser to the Azerbaijani side. The law firms Clifford Chance and Omni are advisers to the issuer, White&Case and BM Morrison Partners Ltd. are legal advisers to the leading managers.
The SGC project – that has already began to take shape as a series of pipelines which will carry Azerbaijani supplies to Europe – is a unique project opening up route for Caspian energy sources.
The gas which will be produced at the second stage of Azerbaijan's Shah Deniz field development will be the main source of Southern Gas Corridor, which envisages the transportation of the Caspian gas to European markets.
Currently, the implementation of one of the main segments of the Southern Gas Corridor – Trans-Anatolian Pipeline – is complete by roughly 65 percent. Another segment, which is called South-Caucasus pipeline is close to 80 percent. And implementation the Trans-Adriatic Pipeline, which is called TAP, is around 34-35 percent. The development of the Shahdeniz Gas field, which is the biggest or one of the biggest fields in the world, is already 90 percent done. The goal is to deliver first new gas from Azerbaijan to the markets next year, and complete this project by 2020.