LONDON, March 5 (IFR) - The Republic of Azerbaijan is
looking to raise USD1bn through its debut Eurobond issue, which
will have a maturity of 10 years, an investor who met with the
sovereign told IFR on Wednesday.
The country, rated Baa3/BBB-/BBB-, plans to open books on
the trade next week and is aiming to price the issue some 100bp
inside state-owned oil company Socar, added the investor.
"It seems like a pretty good story. It is very difficult to
poke holes in it," he said.
Socar has a 2023 note outstanding trading at z-spread of
308bp to yield 5.59%. If the new issue were to
price 100bp inside that level, however, Azerbaijan would be
trading at tighter spreads than higher rated Russia, whose 2023
are quoted at around 230bp over swaps.
"Should Azerbaijan trade inside Russia? I am not sure," said
the investor, adding that potential buyers are likely to demand
a spread of around 240bp-250bp for the new issue.
Azerbaijan is meeting investors in Europe, the UK and the US
this week ahead of the potential bond sale.
Bankers said that investors are flocking to the meetings
ahead of what is the only public bond mandate from the CEEMEA
The timing of the issue will depend on the crisis between
Russia and Ukraine, although President Putin's statement that
force would only be used as a last resort has helped calm the
Barclays, Citigroup and Deutsche Bank are the lead managers.
(Reporting by Davide Scigliuzzo; Editing by Sudip Roy)