Uzbekistan raised almost $1.5 billion through placement of three bond issues

The Ministry of Economy and Finance of Uzbekistan has announced the completion of placement of three new issues of sovereign bonds on international markets. The total amount of funds raised amounted to $1.48 billion in soums, dollars and euros. Demand significantly exceeded supply: the total volume of applications reached $4.2 billion, which is almost three times more than the issue.

Targeted use of the funds raised

The proceeds will be used to cover the budget deficit, and priority areas will be infrastructure projects and environmental initiatives. Part of the amount will go to banks for the development of mortgage lending.

Placement structure

• €500 million ($525 million) was raised under the Sustainable Development Goals financing program. The volume of applications amounted to €1.6 billion, the coupon rate was 5.1%, and the circulation period was four years. These funds will be used to introduce water-saving technologies, improve waste management, and other environmental initiatives. The Ministry undertakes to provide reports on the expenditure of funds in accordance with international standards.
• $500 million was raised through the issue of dollar-denominated bonds with a rate of 6.95% and a maturity of seven years.
• 6 trillion soums ($463 million) were placed in the form of three-year soum bonds with a rate of 15.5%. This money will be used for housing programs, construction and repair of schools and other social facilities.

Previous releases and future plans

The last time Uzbekistan placed bonds was in May 2024, raising a similar amount-about $1.5 billion. Then the rates were higher: 7.125% for dollar-denominated securities, 5.375% - in euros and 16.625% - in soums.

Deputy Head of the State Debt Department of the Ministry of Economic Finance Behruz Karimov confirmed plans for a new Eurobond issue during the Central Bank's media dialogue on February 12. However, the volume and timing of the bond placement will depend on the situation on global financial markets.