Vladimer Papava, an independent lawmaker, called on the government to exercise caution regarding Georgia’s first eurobonds issuance worth USD 500 million.
“The idea of issuing eurobonds is not bad in itself,” MP Papava told lawmaker in Parliament on February 12. “But the world today faces very serious financial problems, as a result of the U.S. mortgage crisis… In light of these developments, issuing eurobonds amounts to jumping into this financial crisis. So it would be much better for the country’s economy to remain financially closed. So I want to tell the Georgian government that it is not the right time to act on this idea now.”
MP Papava, who is a senior fellow at the Tbilisi-based think-tank Georgian Foundation for Strategic and International Studies (GFSIS), said it was “incomprehensible and unclear”, even setting aside the current turmoil on the international financial stage, why the government wanted to raise money given its “boasts of having a budget surplus.”
Parliamentary Chairperson Nino Burjanadze responded that the matter still hadn't been decided.
“We will have additional consultations with the government and if we see that there are more positive sides to this initiative than potential negative ones a decision will be made in favor of issuing eurobonds,” Burjanadze said.
Prime Minister Lado Gurgenidze said on January 31 that a eurobonds issue worth USD 500 million with a maturity of between five and 10 years would take place this April.
He said that the government was in talks with six banks - Citigroup, Deutsche Bank, JP Morgan, Credit Suisse, UBS and Merrill Lynch – and would select two to organize the issue.
The prime minister said the construction of a natural gas storage facility and high-voltage power lines to facilitate increased electricity exports to Turkey were likely to be financed from money raised through the issue.