OREANDA-NEWS  Gazprom placed seven-year Eurobonds in US dollars of $ 1.25 billion at 5.15% per annum, told Manager of the investment company.

The placement of Eurobonds took place on the Irish stock exchange, the demand for securities from investors exceeded $5.4 billion. The Initial benchmark of the yield of the issue was 5.5–5.625%, but then it was reduced to 5.15–5.25%, and Eurobonds were placed at its lower border.

The representative of Gazprom declined to comment.

The organizers of the placement were Gazprombank, VTB Capital, Renaissance Capital, JPMorgan, Banca IMI, Credit Agricole CIB, Mizuho Securities and SMBC Nikko.

Gazprom has not placed Eurobonds in dollars for almost two years. The last time the company offered investors debt securities in this currency in March 2017, when it placed ten-year Eurobonds for $ 750 million at 4.95%.

In 2018, Gazprom entered the international debt market three times, placing two Eurobond issues in euros (1 billion and 750 million) and one in Swiss francs (750 million). In addition, the company placed bonds in Japanese yen (65 billion yen, about $574 million) as part of a club deal for qualified Japanese investors.

Gazprom took advantage of the "window" for placements when investors returned to the global appetite for risk, thanks to the promises of the fed's head Jerome Powell not to tighten monetary policy, says CEO of Sputnik, Alexander Losev. A large demand for securities is a normal situation for such a large company as Gazprom, whose credit rating is at the level of investment, said RBC analyst at Raiffeisenbank Andrey Polishchuk. Applications are satisfied in proportion to the total number, so often investors deliberately inflate the offer to get more bonds, he explains. For example, if you want to buy bonds for $1 million, it is better to send an application for $50 million to increase the chances of getting what you want, says Polishchuk.

The yield of 5.15% was slightly below the fair level, says senior analyst Aton on macroeconomics and debt markets Yakov Yakovlev, but for investors it does not seem to matter, as for them the main thing was to get the debt of a quality Russian company in the portfolio. The high demand is explained by the fact that, firstly, Gazprom is a quality borrower, and, secondly, the supply of Russian risk is very limited — many potential borrowers can not enter the market due to sanctions, and the market volume is gradually reduced due to the repayment of previously issued bonds, he stressed. Over the past three years, Gazprom has been updating its gas export records every time and is likely to continue to increase its share in the European market in the foreseeable future — these circumstances combined have led to a high demand for Gazprom's Eurobonds, Alexander Losev mentions another reason for the popularity of securities among investors.