Uzbek soum-denominated bonds are known as Samarkand bonds, and are designed to help expand the investor base in Uzbek soum as well as raising the profile of the currency in the international debt markets. The growth of the Samarkand bond market will help Uzbek state-owned enterprises (SOEs) and corporates access large-scale foreign investment without foreign exchange risk for the issuers.

With reform momentum, fast-pace demographic transition and a stable fiscal policy, Uzbekistan is on the way to successfully building an offshore local currency bond market, providing diversification in the investor base for Uzbek debt issuers.

London’s expertise in Uzbek soum-denominated bonds

International Finance Corporation (IFC), a member of the World Bank Group, issued its inaugural bond in Uzbek soum in May 2018, raising UZS 80bn – the equivalent of $10m – to expand lending for micro, small and medium enterprises in Uzbekistan. The proceeds of the bond were used to support Hamkorbank, allowing the country’s leading private bank to boost long-term local currency financing, and enabling local businesses to grow while avoiding risks related to borrowing in foreign currency. Since then more than UZS 470bn have been raised on our markets.

London Stock Exchange is home to many offshore local currency bonds. With a number of renminbi (Dimsum) bonds, Indian rupee (Masala) bonds and Indonesian rupiah (Komodo) bonds, London Stock Exchange has extensive experience in promoting local currency bond markets in the international debt markets, eventually benefiting investment via an alternative funding source.

London Stock Exchange stands ready to support first-time Samarkand bond issuers with Uzbekistan-dedicated resources, leveraging the unique experience and network it has built up at the heart of the financial community over the years.