Georgia placed Eurobonds worth $500 million with a maturity of five years on the London Stock Exchange after receiving a demand for more than $2 billion, Finance Minister Lasha Khutsishvili said.

He told reporters that the coupon rate was set at 2.75 percent and added that the government used the issue to refinance the previous emission of the same amount that took place in 2011.

Khutsishvili said that a low coupon rate, which he called “a historical benchmark”, would save the state budget 350 million lari in interest payments over the next five years. The previous issue 10 years ago yielded 6.875 percent.

JP Morgan, Goldman Sachs, and ICBC Standard, as well as Georgia’s TBC Capital and Galt & Taggart acted as organisers of the issue, the minister said.

Investors were from the United States, Britain and the European Union.

“This is an international acknowledgment of Georgia’s macroeconomic, monetary and fiscal policies and demonstration of foreign investors’ confidence in our country’s economy,” Khutsishvili said. “This placement will pave the way for many local companies to make their own issues and attract investment.”

Georgia used the 2011 Eurobonds worth $500 million to refinance a previous issue that took place in 2008.

Georgia’s tourism-reliant economy has been hit especially hard by the COVID crisis and lacks the resource-extraction or manufacturing base that has helped cushion the blow in other ex-Soviet countries.

The country’s gross domestic product declined by 8.3 percent year-on-year in January-February this year, compared to 3.7 percent growth in the same period in 2020.

The International Monetary Fund said last week that “a strong recovery  is expected to commence in the second quarter of 2021, and output is expected to expand by 3.5 percent for the year”.

The IMF has approved the disbursement of $111 million to the ex-Soviet country under its Extended Fund Facility, bringing total disbursements under a three-year programme to $687 million.