The National Bank of Kyrgyzstan will issue 7-year government bonds at 65.24 KGS per bond

Today, February 23, the National Bank of Kyrgyzstan will conduct a non-auction placement of 7-year government treasury bonds. The regulator announced this on its website.

The key feature of the placement is that the price of one bond will be 65.24 KGS with a yield of 15.25% per annum.

It is planned to issue bonds worth a total of 200 million KGS. Their redemption is scheduled for February 23, 2033.

With a standard par value of 100 KGS, the bond is sold at 34.76% below par value. However, this is not a discount, but a mechanism for generating yield. Investors buy the bond for 65.24 KGS today and receive 100 KGS upon maturity in seven years. The difference between the purchase price and the face value — 34.76 KGS — is distributed over the entire term and generates an effective yield of 15.25% per annum.

We would like to add that a yield of over 15% on 7-year instruments indicates that long-term money in the national currency remains highly valued.