YEREVAN, June 10. /ARKA/. Some 10 universal credit organizations in Armenia are gearing up for the issuance of $20-$40 million worth securitized bonds in autumn, according to Tigran Karapetyan, the executive director of Capital Asset Management (the owner of CJSC Capital Investments).
The first issuance of $2 million worth securitized bonds was carried out in 2015 by 5 credit organizations -CARD AgroCredit, Garni Invest, Global Credit, Kamurj, and Nor Horizon. The bonds were issued by the Loan Portfolio Securitization Fund I. Managed by Capital Investments, the Fund was established in August 2015 with the purpose of securitizing the $2 million worth microfinance loans of the five participating universal credit organizations.
The Securitization Fund is offering the bonds publicly on NASDAQ OMX Armenia. To make this investment attractive and relatively risk-free for bondholders, a USAID Development Credit Authority (DCA) guarantee was issued in late November 2015 to cover 50 percent of the bond’s principal.
Primary bondholders include pension asset managers and several banks, among other financial institutions. The bondholders are collectively represented by a legal agent approved by USAID, as a guarantor for the transaction.
According to Tigran Karapetyan, “this new type of financial product combines many development initiatives – all focused on making more funds available in the credit system for the development of rural areas. The project is of great importance for the universal credit organizations taking into account that they in Armenia have difficulty getting local commercial finance, and are too small to issue their own bonds.’
There are 32 registered universal credit organizations in Armenia now. -0-
