OREANDA-NEWS. MDM Bank bought back 99.9% of its RUR 6bn worth of bonds in accordance with the put option embedded in the bond issue, the press service of the bank reported. As the Bank expected, investors have exercised the put option for the bonds as the coupon of 8.5% per annum for the next two coupon periods does not correspond to the current market level for private bank securities. The coupon rate was set by the Bank in order to retain flexibility in the unlikely but possible event of a significant improvement in market conditions. Following the repurchase of the bonds, all of them have been placed back in the market among high-quality ("real money") investors with a yield of around 11% per annum plus commission to international banks, which have assisted MDM Bank in structuring this successful placement. The new effective yield level reflects the rise in market interest rates as well as the premium for the new placement, which is adequate in the current environment.

The CEO of MDM Bank Michel Perhirin said: "MDM Bank is very pleased with the outcome as it allows the Bank to satisfy growing demand for loans, including that originating from clients of other banks, and simultaneously keep intact the large liquidity cushion accumulated by the Bank as a precaution against continued market turmoil. MDM views the bond sale as the first true market placement, not a club deal, for a private Russian bank in the new market environment, which can serve as a good benchmark for other banks."