As an exporter of oil and gas, Azerbaijan has been hit by the depressed oil prices and was downgraded last month by Fitch to BB+ with a negative outlook. International Bank of Azerbaijan has a US$200m loan scheduled to mature at the end of April, while Accessbank has a dual tranche US$60m loan, US$30m of which is also due to mature at the end of the month.
Neither are likely to try and tap the loan market at this point for a refinancing. Instead the banks are expected to repay the loans and look to tap the market at a later date.
"We do not expect FIs from Azerbaijan to come to the market,” a banker said. "Azerbaijan banks are wise to realise the country has been downgraded – it is just not the right time. Saudi and Qatar may be tapping the international markets because of low commodity prices but their country risk is lower.”
There could be some appetite for these loans, but if a deal was to get done it would be for a smaller amount, a second banker said.
"They would be able to raise some funds I am sure, but it is a question of how much compared to last year. If they raised US$200m last year and were only able to get US$75m-$100m this year, it would not be great reputationally,” he said.
It marks a change in fortune, after both deals closed oversubscribed last year.
Citibank acted as coordinator on IBA’s US$200m facility, which paid a margin of 300bp over Libor and was increased from US$125m.
Raiffeisen Bank International led the US$60m refinancing for Accessbank which was upped from US$50m. The deal has a dual tranche structure with one and two year maturities.
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