BAKU, Azerbaijan, August 15. Uzbekistan's Asia Alliance Bank plans to issue $20 million in foreign-currency bonds, adding to a growing number of Uzbek financial institutions seeking dollar-denominated funding from investors.
This was announced in a statement published by KAP DEPO following a decision by the bank's Supervisory Board, which was posted on OpenInfo on August 10
The bonds will be offered through an open subscription and will carry a 7% annual coupon with a three-year maturity. Each bond will have a face value of $100, with coupon payments made quarterly.
The placement is scheduled to begin on the 15th calendar day after the notice of the bonds' state registration is published on OpenInfo.
Trend's analysis shows that Asia Alliance Bank's planned issue represents a relatively lower-cost source of foreign-currency funding compared with recent offerings announced by Uzbek microfinance institutions. The bank's 7% coupon is 4.5 percentage points below the rate planned by Agat Credit, despite the longer three-year maturity.
Trend's calculations show that the planned $20 million issue is twice the size of Agat Credit's proposed $10 million foreign-currency bond offering. Agat Credit plans to issue two-year bonds with an 11.5% annual coupon, meaning investors would receive a significantly higher nominal return in exchange for exposure to a shorter-maturity microfinance issuer.
The two planned offerings also highlight differences in funding costs across Uzbekistan's financial sector. Banks generally have broader access to funding and a lower perceived credit risk than microfinance institutions, allowing them to raise foreign-currency financing at comparatively lower coupon rates.
In Trend's assessment, the planned bond issue indicates that Uzbek banks and non-bank financial institutions are increasingly using capital-market instruments to diversify funding sources beyond traditional bank financing. For Asia Alliance Bank, the three-year maturity could provide longer-term foreign-currency funding, while the quarterly coupon structure may broaden the appeal of the securities to income-focused investors.
