OREANDA-NEWS. April 22, 2013. Russian Railways, rated Baa1/BBB/BBB (all stable), priced a EUR1bn 8-year benchmark, its debut EUR-denominated bond.

Following a 4-day European roadshow, the transaction was announced on April 12th with initial pricing guidance of MS+220/230bp, which was narrowed to MS+210bp area following investor interest.

The final orderbook stood in excess of EUR3bn at closing, reflecting participation of 280 accounts, with a final yield set at 3.375% corresponding to a spread of 203.7bp over mid-swaps.

?Demand was driven by German and Austrian investors with a combined participation share of 35%, followed by the UK (32%) and Switzerland (10%), completed with additional demand from other European jurisdictions (15%) and Asia (2%). Institutional investors dominated the transaction, with asset managers’ participation share of 67%. Insurance companies and pension funds took 11% of transaction, while central banks and official institutions took 2%. Finally, the distribution was completed with banks and private banks (16%) and other accounts.

The bond transaction structured as a LPN issuance was signed on 16th April and closed on 18th April 2013

The proceeds raised through the EUR denominated bond offering will be used by Russian Railways in the ordinary course of its business, including for funding the Company’s investment programme and the repayment of its indebtedness.

The issue’s joint bookrunners and joint lead managers were Natixis, RBS, SG CIB and VTB Capital.