OREANDA-NEWS. January 31, 2013. FGC UES has set the coupon rate for its series 24 local rouble bonds at 8% per annum, 40 basis points lower than the guideline coupon. The bonds will mature 15 years from placement and have a put option 7 years after the sale, reported the press-centre of Sberbank.

The placement took place on the MICEX stock exchange as an auction to determine the coupon. This allowed the best possible price to be achieved and meant that the issuer was able to fully take advantage of the extensive interest shown by investors. During the auction 154 bids were submitted by Russian and international investors. Market demand had reached RUB 30 bln when the bidding process ended during the main trading session

The state company FGC UES is one of the few Russian corporate borrowers that have successfully used an auction to determine the coupon rate for a bond placement.
“We are very pleased with the outcome of the auction. This placement format is extremely similar to the one that the Ministry of Finances of the Russian Federation uses when it sells government bonds. The Federal Grid Company is continuing to lead the local corporate market by successfully opening up new market opportunities. We are grateful to the investors for their interest in this placement,” remarked Andrey Kazachenkov, First Deputy Chairman of the Management Board, member of the Management Board.

FGC UES is the first Russian company for the past year to carry out a bond placement with such a long maturity period. This placement has set a new put option and coupon rate benchmark for corporate sector non-financial borrowers who wish to procure long-term rouble financing.

The deal was arranged by Sberbank CIB[1], Gazprombank and Renaissance Capital. Sberbank CIB was the technical underwriter. Each bond of the series 24 issue has a nominal price of RUB 1,000. The coupon period is 182 days.