Loans & Secured Financing

LOANS AND SECURED FINANCINGS

1 What are the primary advantages and disadvantages in your jurisdiction of incurring indebtedness in the form of bank loans versus debt securities?

The popularity of bank loans compared with debt securities lies in the underdevelopment of the Uzbek securities market. There are statutory limitations for companies to issue debt securities (eg, private limited liability companies are not allowed to issue them at all); their circulation is heavily regulated by the Centre for Control and Development of the Securities Market; while the instrument is generally viewed by the companies as unprofitable and somewhat unexplored in practice. One of the few issuers of debt securities within the market are commercial banks that use them for inter-bank lending or for attracting funds from state-owned investors.