Uzbek companies granted right to issue dollar-denominated bonds with $50 million cap

Under the new rules, foreign currency bonds are defined as debt securities with a face value and coupon yield expressed in foreign currencies, such as the U.S. dollar or the Euro. The maximum volume for a single issuance is capped at $50 million, and the total value of all outstanding bonds from a single issuer cannot exceed this threshold. To ensure market stability, only issuers, investment intermediaries, and agent banks with "regulatory sandbox" participant status are permitted to engage in these operations, though the use of Special Purpose Vehicles (SPVs) for issuance is allowed.

The regulations introduce specific requirements regarding collateral. Companies may issue unsecured bonds only within the limits of their own equity capital. If the issuance exceeds the issuer's equity, the portion above that threshold must be secured by assets such as real estate, cash, bank guarantees, or insurance policies. An exception to this requirement is made for certain banks maintaining high credit ratings. When real estate is used as collateral, it must undergo a market value assessment; it can only cover up to 75% of its appraised value and cannot constitute more than 50% of the total collateral package.

Financial transparency and stability are further reinforced through a series of mandatory covenants. Issuers must disclose their financial standing in their prospectus and maintain specific ratios: a debt-to-income ratio of no more than 6, a debt service coverage ratio of at least 1.1, and a current liquidity ratio of at least 1.2. Additionally, the regulations strictly prohibit technical defaults on bond payments. To protect individual investors, the document mandates that physical persons purchase these bonds exclusively through the banking system. Investment intermediaries are prohibited from accepting cash directly from individuals.

The trading of these bonds will take place on the Tashkent Stock Exchange in accordance with its established rules. For an issuance to be considered successful, at least 50% of the planned volume must be sold during an open subscription, while a closed subscription requires 100% placement. Furthermore, agreements between issuers and intermediaries must include market-making obligations for the intermediary to ensure liquidity. To support these new financial instruments, the Central Bank has already adjusted foreign exchange operation rules, granting issuers the right to purchase the necessary currency to fulfill their obligations and pay coupon yields.