Georgia prepares large lari-denominated bond issue for international investors

TBILISI. Feb 6 (Interfax) - The Georgian Finance Ministry is planning an issue of large-volume treasury bonds in the national currency (lari) for international investors following the successful placement of $500 million Eurobonds on the LSE, Finance Minister Lasha Khutsishvili said.

"We will also have a large issuance, within which we will invite international investment companies. During the roadshow [before the Eurobond issuance], many companies expressed a desire to participate more actively in issuing securities denominated in lari, or treasury bonds. Furthermore, we are already seeing activity from non-residents and foreign companies regarding our securities. This is our priority," Khutsishvili was quoted as saying by the publication bp.ge.

Meetings were held with over 100 international companies, and "we will do this [the placement in the national currency] this year," he said.

The potential interest of international investors in lari-denominated debt instruments is related to high volatility in international markets, Khutsishvili said. "Today, international markets are definitely not in a favorable state. This is related to very high volatility. The main factor determining this is, undoubtedly, geopolitical factors. Among them to some extent are trade wars, and this encourages international investors to invest not only in U.S. dollars or euros but also in various currencies," he said.

Among the factors supporting investor interest, he highlighted the stability of the lari, Georgia's high economic growth, low budget deficit and tight monetary policy.

Khutsishvili also said that the Finance Ministry is planning a placement of government bonds on Asian markets. "We are working on different markets. Asian markets are quite interesting; there is less fluctuation there. We will definitely have placements in Asia in the near future," he said.

Last week, Georgia placed $500 million in five-year unsecured Eurobonds on the London Stock Exchange (LSE) with a coupon of 5.125% per annum and maturity on January 28, 2031. The organizers of the issue are JP Morgan, Citi, ICBC and Societe Generale. The new issue is intended to refinance the $500 million five-year Eurobonds issued in April 2021 with a rate of 2.75%. Investor demand for the Georgia-2031 Eurobonds exceeded supply 5.5-fold and amounted to $2.8 billion.