In Azerbaijan, state guarantee will be provided for corporate bonds

A mechanism for providing state guarantees for corporate bonds has been implemented in Azerbaijan.

As Report informs, this was announced by Elshan Kerimov, director of the credit guarantees department at the Mortgage and Credit Guarantee Fund.

According to him, the analysis conducted by the fund in the securities market showed that in many cases, business entities cannot place issued bonds due to collateral problems.

"As a result, we began working on a mechanism for providing guarantees on bonds, and the relevant rules have already been approved. Currently, negotiations are underway with the first business entity, a guarantee notification has been sent, and a guarantee agreement has been signed with them," E. Kerimov noted.

He also explained that the essence of the mechanism is to create a new product, formed as a unique method of additional borrowing.

\"Within the framework of the corporate bond guarantee mechanism, the fund's guarantee is up to 60%, as they are considered more risky than bonds issued by banks," the department head added.

It should be noted that in January-July of this year, the volume of transactions in the corporate securities market increased by 13.3% and amounted to 1 billion 421.876 million manats.