OREANDA-NEWS. State Corporation ‘Bank for Development and Foreign Economic Affairs (Vnesheconombank)’ made a successful placement of two Series of eurobonds for a total amount of 2 billion US dollars:
- 5-year eurobonds worth 850 million US dollars at a coupon rate of 4.224% (280 basis point over mid-market swap rate);
- 10-yaer eurobond worth 1 150 million US dollars at a coupon rate of 5.942% (320 basis point over mid-market swap rate);

Citigroup, HSBC, J.P. Morgan и Mitsubishi UFJ acted as organizers of the placement.

More than 330 investors submitted bids for the placement; the total amount of submitted bids exceeded supply by 3.6 times. In the course of the marketing and as a result of a meaningful dialogue with investors Vnesheconombank managed to reduce premium with regard to the new bond issue to a minimum level for issuers from developing countries in the second half-year of 2013. A coupon rate for five-year eurobonds was fixed at a level of Vnesheconombank’s current investment curve and with respect to ten-year eurobonds excess yield curve was only 5 basis points. Both series are characterized by a wide diversification with respect to the type of investors and geographical distribution.

According to Deputy Chairman – Member of Vnesheconombank’s Board Alexandr Ivanov the issue that has become the largest one in terms of placing eurobonds in dollars for Russian financial institutions since 2008 set new benchmarks not only for Vnesheconombank but also for other issuers in Russia.

“A marketing strategy chosen by Vnesheconombank made it possible to complete the bond placement with regard to Series 9 and 10 at substantially lower rates than the initially announced benchmark. Vnesheconombank not only made the largest placement of its eurobonds in US dollars on international capital markets but also set the lowest coupon rate for its eurobonds denominated in US dollars (4.224% for five-year eurobonds). A great demand for Vnesheconombank debt instruments testifies to the fact that international investors recognize the importance of Vnesheconombank’s role in developing the Russian economy. We are grateful to investors and organizers of the placement and hope for further fruitful cooperation”, he said.

The funds raised through placing eurobonds are to be used for funding top-priority projects of the Bank for Development.