The first issues of municipal bonds worth 7.5 million lei in Moldova, issued by the mayoralties of Singera and Ceadir-Lunga, have been successfully placed in the capital market.
The Independent Think-Tank Expert-Grup reported their successful debut on the capital market, noting that the subscription for these shares, issued on August 5 with the support of Victoriabank and Expert-Grup, was fully completed in less than a week after the announcement of the public offer. In particular, after the public offer of municipal bonds issued by the Ceadir-Lunga mayor's office, until August 11, the financial intermediary Victoriabank received 10 applications for subscription to class I bonds (maturity 3 years). They covered the total amount specified in the prospectus, namely 3 million lei. With the funds raised, the Ceadir-Lunga mayor's office plans to implement a project to improve the road infrastructure in the municipality. At the same time, by August 11, 2021, the same financial intermediary received 27 applications for the subscription of Class I and II municipal bonds issued by the mayor’s office of Singera. They cover the total amount envisaged in the Public Offer Prospectus of 4.5 million lei (2 million lei of class I bonds with a maturity of 2 years and 2.5 million lei of class II bonds with a maturity of 3 years). The mayor's office of Singera plans to finance the construction of a water supply system in the area of Singera-Revaca at the expense of the attracted funds. The deadline for the subscription for bonds issued by the two mayor's offices was originally set on September 3, but according to the decision of the National Commission for the Financial Market (NCFM) dated August 13, 2018 on the approval of the Instruction on the procedure for registering bonds issued by local public authorities and the content of the public offer prospectus, the issue can be closed ahead of schedule if all bonds are signed before the expiry date specified in the prospectus. As noted by Expert-Grup, the Ceadir-Lunga and Singera mayoralties on August 13 adopted the decision on the successful early completion of public offers of municipal emissions. The nominal value of one bond, indicated in the public offers, was 1,000 lei, and the interest rates on them vary from 6.5% to 6.7%. Municipal bonds were issued through Victoriabank. The process was also supported by a team of Expert-Grup experts who are implementing the project “Local government bonds as a measure of increasing local autonomy with the financial support of the Dutch Embassy in Moldova.” According to national law, bonds issued by local government agencies are debt instruments to obtain financing, usually for capital investments. According to the NCFM, bonds issued by local authorities can serve as an impetus for the revitalization of the capital market and diversification of business opportunities for potential investors. // 16.08.2021 - InfoMarket.
