Azeri SGCC Places $1bn Eurobonds on World Markets

Azerbaijan's Southern Gas Corridor Company has this month issued a second, $1bn tranche of 10-yr eurobonds, a year after it issued the first. The yield last year was 7%/yr (coupon rate 6.875%) and this year it is lower, at 5.8%/yr, reflecting greater confidence in the capital markets in Azerbaijan and in the prospects for SGCC. Combined, the issues are the biggest in the country at present.

Azertag reports that US investors bought 45% of the bonds and UK investors another 40%; other European countries bought 13% and the remainder went to buyers in Asia and the Middle East. "Subscriptions to the bonds exceeded expectations, 90% of applications were submitted by fund managers, which contributed to their diversified distribution among leading institutional investors,” Azertag reported.

Azerbaijan owns all of the company, which represents its interests in the Southern Gas Corridor (SGC) project (pictured below) which is now being built with the support of the European Union. The 3,500-km SGC will carry 6bn m³/yr of Shah Deniz gas to Turkey and 10bn m³/yr to Europe in 2021. Deliveries to Turkey will start to build up from next year.

(Source: Tanap)

A syndicatlon of Citi Bank, UniCredit and JP Morgan handled the sale, while Lazard Freres was financial adviser to SGCC and Clifford Chance and Omni were its legal advisers.

Azerbaijan desk