Bonds

The Bank issues bonds to raise funds from the public for a specific period of time. We pay interest to bondholders in a form of coupons on a regular basis. The face value of bonds is paid at maturity.

Placement is the initial sale of bonds to investors

Generally, investors have to buy at least one bond. The investment cap is typically limited to the number of bonds issued, however, the issuer may introduce limits to the maximum number of bonds to be bought by one investor. Note that the number of bonds that can be purchased can only be expressed in integers.

Typically, a placement requires 2 to 3 months to be completed.

Yes, however, note that bonds are sold to investors together with coupons accrued.

In order to sell bonds on the stock exchange, you will need to access brokerage services. Learn more.

The following costs are associated with the sale of bonds:

• Brokerage fee: 0.1% of the trade value, min. AMD 2,000
• Stock exchange fee: 0.005% of the trade value

The period of selling bonds depends on several factors:

• Number of bonds you want to sell
• Whether there are buyers in the market interested in that specific number of bonds

No, once the investor purchases bonds, he/she cannot sell them back to the issuer.

Yes, you can sell your bonds to another person.

Selling bonds on the secondary market depends on several factors:

• Number of bonds you would like to sell
• Price, at which you are willing to sell the bonds

The minimum daily quotation provided by the market maker is 1% of the total number of bonds of the given category.

Yes, you can purchase bonds after maturity if there are current placements at that time. You can also use broker services to purchase bonds on the secondary market.

Yes, you can pledge bonds.

If you buy bonds during their initial placement (before they are listed on the stock exchange) you can learn about prices on the official website of the Bank. After listing, you can obtain information on the previous day’s price of bonds from your broker.

No, investors are bound to the maturity periods specified in terms of issue. However, you can sell all or some of your bonds before maturity.

Interest is paid in Armenian drams at the average exchange rate of the Central Bank of Armenia as of the day before.

No, you purchase bonds together with interest accrued.

Listed bonds already have a market price, which may differ from the placement one. The market price can be higher or lower than the face value of bonds. Quotations are typically provided by the market maker and depend on the supply and demand for bonds.

Investments in corporate bonds issued by banks are insured by the Deposit Guarantee Fund in the same way as bank deposits.

There is no fixed schedule, however, Ameriabank issues bonds quite frequently and in this respect, it is the most active issuer in Armenia.

According to the Tax Code of the Republic of Armenia, interest on listed bonds owned by the resident and non-resident individuals and non-resident legal entities is not taxable.

• Face value of bonds

A value, at which a bond is issued and repaid. E.g., AMD 100,000

• Quantity of issued bonds

E.g., 50,000 bonds

• Total value of the issue 

The face value of bonds multiplied by their quantity. E.g., 100,000*50,000 = AMD 5,000,000,000

• Maturity

A period, for which bonds are issued. E.g., 27 months

• Coupon

The interest rate of the bond. E.g., 9% per annum

• Coupon payment 

The interest paid to the investor, calculated based on the face value of the bond. E.g., 100,000*9% = AMD 9,000

• Frequency of payment

Frequency of coupon payments.

• Market yield/interest rate

An interest rate, a change of which affects the price of bonds. During the placement, the market rate is equal to the coupon rate of the bond, i.e. within the period when bonds are sold at the face value.