The NCFM approved the first two prospectuses of municipal bonds worth7.5 million lei initiated by the mayoralties of Singera and Ceadir-Lunga.
In particular, the National Commission for the Financial Market (NCFM) approved the prospectuses of public offers for the implementation of the first bond issues announced by the mayoralties of Singera and Ceadir-Lunga. This will be the first bond issue in Moldova by local public authorities. The funds raised through these emissions will be used to implement infrastructure projects. The proposal prospectus of the Singera mayor's office provides for the public issue of class I bonds (circulation period 2 years) and class II bonds (circulation period 3 years) with a total nominal value of 4.5 million lei (the nominal value of one bond is 1000 lei). The funding will be used to supply drinking water to households in the locality and to build a water supply network in areas where water is not available (the new Singera-Revaca microdistrict, which will benefit approximately 300 households). In turn, the emission prospectus of the Ceadir-Lunga mayor's office provides for the public issue of class I municipal bonds (with a maturity of 3 years) worth 3 million lei (the nominal value of one bond is 1,000 lei). The proceeds from this bond issue will be used to develop local infrastructure, in particular for the reconstruction of 11 roads and sidewalks in the municipality. The interest rate on both public offers will be 6.5-6.7% per annum; municipal bonds will be issued through Victoriabank. The process is also supported by a team of experts from the Independent Think Tank Expert-Grup, which is implementing the project “Local government bonds as a measure of increasing local autonomy” with financial support from the Dutch Embassy. According to national law, bonds issued by local government agencies are debt instruments for obtaining financing, usually for capital investments. According to the NCFM, bonds issued by local government bodies can serve as an impetus for the revitalization of the capital market and diversification of business opportunities for potential investors. Earlier, the Deputy Chairperson of the NCFM Nina Dosca noted that for Moldova, municipal bonds are a modern financial instrument for attracting investments in settlements, which implies many benefits with low costs. Closer cooperation between local authorities and the capital market can also lead to an increase in the quality and efficiency of financed projects, as well as to stimulate long-term financial planning, she said. “NCFM, in agreement with the competent authorities, has developed and promoted legislation related to the process of placement and circulation of municipal bonds, and according to the proposals of Expert-Grup, the NCFM recently initiated amendments to its normative acts that clarify some of the applicable norms,” added the Deputy Chairperson of the NCFM. // 02.08.2021 - InfoMarket
