SOCAR Polymer has entered a new stage of its activity by re-financing part of the existing loan and issuing structurally subordinated bonds on the domestic market.
As known, the SOCAR Polymer project (“Project”) is part of SOCAR’s strategy of modernization of the petrochemical industry of Azerbaijan. It is the first project in our country’s petrochemical sector implemented through public-private partnership, with the total investment of US $864 million. At the same time it is the first project in Azerbaijan’s non-oil sector to be financed under the internationally accepted “Project finance” principles. About 60% (US $489 mln) of the total investment costs covered through a non- recourse loan received from Gazprombank.
Considering the current stage of the Project as the plants have been put into operation and the construction risks have been eliminated, refinancing part of the current loan through a lower-interest loan has been started to proceed as the next phase of SOCAR Polymer’s financing strategy.
Given the government’s domestic financial market development policy and the current stage of the Project, our company has decided to issue structurally subordinated bonds on the domestic market and to re-finance the existing debt.
Following negotiations with the local banks, the main agreed terms of issuing bonds are as follows:
PSG-Kapital Investment Company, GPB-Financial Services and PASHA Kapital Investment Company have been selected as underwriters to implement the emission process. PSG-Kapital Investment Company and PASHA Kapital Investment Company were involved in the structuring of the deal with the local banks and GPB-Financial Services was responsible for involving foreign banks and structuring considering existing loan. Placement of bonds started on the first business day following the 19th of June 2020 when the Central Bank of the Azerbaijan Republic registered the bonds’ issuance and has been completed successfully.