20.12.2023, 20:03
Sovcombank placed local bonds for $6.5 million
Source: OREANDA-NEWS
OREANDA-NEWS Sovcombank placed perpetual local bonds for $6.475 million as part of the replacement of the remainder of the "eternal" subordinated Eurobond issue originally placed by Vostochny Express Bank, which was later joined to Sovcombank.
According to the report of the credit institution, the share of actually placed bonds from the total number of securities to be placed amounted to 57.96%. But the remainder of this issue was of small volume – only $11.17 million.
The bonds were paid for during their placement in Eurobonds, the rights to which are accounted for by Russian depositories, as well as in cash, the intended use of which is the purchase of Eurobonds. It follows from the bank's disclosure that 4,875 thousand bonds were paid in cash, 1.6 thousand bonds in Eurobonds. All payments on replacement bonds will be made in rubles at the exchange rate of the Central Bank of the Russian Federation on the date of fulfillment of obligations.
Vostochny Express Bank placed subordinated Eurobonds worth $125 million in 2013, and in 2017 this issue was converted into an indefinite one. Subsequently, the bank was joined to Sovcombank.
At the end of October, the Supervisory Board of Sovcombank approved the placement of replacement bonds for all Eurobond issues – these are two "perpetual" issues, a subordinated issue maturing in April 2030, as well as the balance of the "perpetual" subordination of $11.17 million. The credit institution has already carried out the replacement of three issues, the replacement of the subordinated issue with repayment in 2030 is scheduled to be completed next week.
All issues provide for the possibility of early repayment of bonds at the discretion of the issuer.
Sovcombank has been under U.S. blocking sanctions since February 2022, which has deprived it of the technical ability to service its Eurobonds in full.
Since last year, the credit institution has temporarily suspended payments on "perpetual" Eurobonds, using the option provided for by the terms of perpetual debt instruments for banks. In November of this year, the bank announced the resumption of payments on "eternal" Eurobonds to holders of securities whose rights are registered in Russian depositories.
In November last year, Sovcombank completed the placement of local bonds for $163.6 million (27% of the possible volume) under a closed subscription. The credit institution reported that as part of the placement of this issue, the bank's Eurobonds of various types, including perpetual ones, could be exchanged for new local bonds. Formally, this issue of local bonds was not a substitute, since its maturity did not coincide with the maturity of Eurobonds, as provided for by the law on the issue of such bonds. The bank itself positioned it as a "process of buying and selling" debt securities.
According to the report of the credit institution, the share of actually placed bonds from the total number of securities to be placed amounted to 57.96%. But the remainder of this issue was of small volume – only $11.17 million.
The bonds were paid for during their placement in Eurobonds, the rights to which are accounted for by Russian depositories, as well as in cash, the intended use of which is the purchase of Eurobonds. It follows from the bank's disclosure that 4,875 thousand bonds were paid in cash, 1.6 thousand bonds in Eurobonds. All payments on replacement bonds will be made in rubles at the exchange rate of the Central Bank of the Russian Federation on the date of fulfillment of obligations.
Vostochny Express Bank placed subordinated Eurobonds worth $125 million in 2013, and in 2017 this issue was converted into an indefinite one. Subsequently, the bank was joined to Sovcombank.
At the end of October, the Supervisory Board of Sovcombank approved the placement of replacement bonds for all Eurobond issues – these are two "perpetual" issues, a subordinated issue maturing in April 2030, as well as the balance of the "perpetual" subordination of $11.17 million. The credit institution has already carried out the replacement of three issues, the replacement of the subordinated issue with repayment in 2030 is scheduled to be completed next week.
All issues provide for the possibility of early repayment of bonds at the discretion of the issuer.
Sovcombank has been under U.S. blocking sanctions since February 2022, which has deprived it of the technical ability to service its Eurobonds in full.
Since last year, the credit institution has temporarily suspended payments on "perpetual" Eurobonds, using the option provided for by the terms of perpetual debt instruments for banks. In November of this year, the bank announced the resumption of payments on "eternal" Eurobonds to holders of securities whose rights are registered in Russian depositories.
In November last year, Sovcombank completed the placement of local bonds for $163.6 million (27% of the possible volume) under a closed subscription. The credit institution reported that as part of the placement of this issue, the bank's Eurobonds of various types, including perpetual ones, could be exchanged for new local bonds. Formally, this issue of local bonds was not a substitute, since its maturity did not coincide with the maturity of Eurobonds, as provided for by the law on the issue of such bonds. The bank itself positioned it as a "process of buying and selling" debt securities.
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