CREDIT BANK OF MOSCOW placed a debut USD 700 mln perpetual subordinated Eurobond issue
11.05.2017
26 April 2017 CREDIT BANK OF MOSCOW (the “Bank”) placed its debut perpetual subordinated Eurobond issue meeting Basel III requirements for additional Tier I capital. The Reg S/Rule 144A Eurobonds, issued to finance a subordinated loan to the Bank through the Bank’s special purpose vehicle CBOM Finance p.l.c., were listed on the Irish Stock Exchange and garnered USD 700 mln, a record-setting amount for the Bank. The quarterly coupon rate was fixed at 8.875% for the first 5.5 years. The bonds are callable in November 2022 and on every coupon payment date thereafter.
The Eurobond issue is the first public international placement of Reg S/Rule 144A perpetual subordinated notes, meeting the Basel III requirements (the Bank of Russia’s Regulation 395-P), out of Russia.
A series of meetings with investors in New York, London, Zurich, Singapore and Hong Kong resulted in a strong order book with a wide geographical coverage and international demand: UK (30%), USA (19%), Russia (17%), Europe (13%), Asia and Middle East (10%), Switzerland (9%), other countries (2%).
"The success of our preceding subordinated Eurobond issue in March paved the way for the new transaction, – noted Vladimir Chubar, Chairman of the Management Board. – Seeing the four-time oversubscription, we decided to upsize the placement compared to the target amount to accommodate the demand of a wide range of investors".
The order book opened with an initial price guidance set at the "low 9% area", but the 4-times oversubscription brought the rate down to 8.875%, with a certain premium to investors and an increase in the issuance amount to USD 700 mln, compared to initially targeted market benchmark.
The subordinated loan will be included in full in the Bank’s additional Tier I capital once the respective approval by the Bank of Russia is received.
This is a milestone deal for the Russian banking market continuing the Bank’s successful string of transactions closed earlier this year: a USD 600 mln subordinated Eurobond (Tier II) issue and a USD 500 mln syndicated loan. The Bank has become the leader in the Russian banking sector in terms of issuance size and number of public offerings successfully executed in the international capital markets this year.
Société Générale acted as sole structuring advisor, global coordinator and bookrunner, Credit Suisse Securities (Europe) Limited and HSBC Bank plc acted as global coordinators and bookrunners, while Citigroup Global Markets Limited and J.P. Morgan Securities plc acted as joint lead managers and bookrunners. REGION Broker Company LLC and Raiffeisen Bank International AG were joint lead managers.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY IN THE UNITED STATES OF AMERICA (EXCEPT TO QUALIFIED INSTITUTIONAL BUYERS, AS DEFINED IN RULE 144A UNDER THE US SECURITIES ACT OF 1933 (THE “SECURITIES ACT”) THAT ARE ALSO QUALIFIED PURCHASERS AS DEFINED IN SECTION 2(A)(51) OF THE US INVESTMENT COMPANY ACT OF 1940), AUSTRALIA, CANADA, JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD BE UNLAWFUL. THIS PRESS RELEASE DOES NOT CONSTITUTE OR FORM A PART OF ANY OFFER OR SOLICITATION TO PURCHASE OR SUBSCRIBE FOR SECURITIES IN THE UNITED STATES OR IN ANY OTHER JURISDICTION.
THE SECURITIES TO WHICH THIS PRESS RELEASE RELATES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, US PERSONS (AS SUCH TERM IS DEFINED IN REGULATION S UNDER THE SECURITIES ACT), EXCEPT PURSUANT TO REGISTRATION OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THERE WILL BE NO PUBLIC OFFER OF SECURITIES IN THE UNITED STATES.
THIS PRESS RELEASE DOES NOT CONSTITUTE OR FORM PART OF AN OFFER OR INVITATION TO SELL OR ISSUE, OR ANY SOLICITATION OF AN OFFER TO BUY OR SUBSCRIBE FOR, ANY SECURITIES, IN THE UNITED STATES OR ANY OTHER JURISDICTION NOR SHALL IT (OR ANY PART OF THIS PRESS RELEASE) OR THE FACT OF ITS DISTRIBUTION FORM THE BASIS OF, OR BE RELIED UPON IN CONNECTION WITH, OR ACT AS ANY INDUCEMENT TO ENTER INTO, ANY CONTRACT OR COMMITMENT OR INVESTMENT DECISION WHATSOEVER. THE DISTRIBUTION OF THIS PRESS RELEASE IN CERTAIN JURISDICTIONS MAY BE RESTRICTED BY LAW AND PERSONS INTO WHOSE POSSESSION ANY DOCUMENT OR OTHER INFORMATION REFERRED TO HEREIN COMES SHOULD INFORM THEMSELVES ABOUT AND OBSERVE ANY SUCH RESTRICTIONS. ANY FAILURE TO COMPLY WITH THESE RESTRICTIONS MAY CONSTITUTE A VIOLATION OF THE SECURITIES LAWS OF ANY SUCH JURISDICTION.
RECIPIENTS OF THIS PRESS RELEASE WHO INTEND TO PURCHASE ANY SECURITIES IN THE FUTURE ARE REMINDED THAT ANY SUCH PURCHASE OR SUBSCRIPTION MUST BE MADE SOLELY ON THE BASIS OF THE INFORMATION CONTAINED IN ANY FINAL FORM PROSPECTUS PUBLISHED IN CONNECTION WITH ANY SUCH SECURITIES. THIS PRESS RELEASE IS NOT BEING MADE, AND THIS PRESS RELEASE HAS NOT BEEN APPROVED, BY AN AUTHORISED PERSON FOR THE PURPOSES OF SECTION 21 FINANCIAL SERVICES AND MARKETS ACT 2000, AS AMENDED (THE “FSMA”). THIS PRESS RELEASE IS NOT BEING DISTRIBUTED TO, AND MUST NOT BE PASSED ON TO, THE GENERAL PUBLIC IN THE UNITED KINGDOM OR TO PERSONS IN THE UNITED KINGDOM SAVE IN THE CIRCUMSTANCES WHERE SECTION 21(1) OF THE FSMA DOES NOT APPLY. THIS PRESS RELEASE IS DIRECTED ONLY AT PERSONS WHO (I) ARE OUTSIDE THE UNITED KINGDOM OR (II) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER") OR (III) ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS ETC") OF THE ORDER OR (IV) TO WHOM THIS PRESS RELEASE MAY OTHERWISE BE DIRECTED WITHOUT CONTRAVENTION OF SECTION 21 OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS PRESS RELEASE MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS PRESS RELEASE RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS COMMUNICATION IS NOT INTENDED FOR DISTRIBUTION TO AND MUST NOT BE PASSED ON TO ANY RETAIL CLIENT.
THE SECURITIES REFERRED TO IN THIS PRESS RELEASE ARE NOT INTENDED TO BE SOLD AND SHOULD NOT BE SOLD TO RETAIL CLIENTS IN THE EUROPEAN ECONOMIC AREA, AS DEFINED IN THE RULES SET OUT IN THE PRODUCT INTERVENTION (CONTINGENT CONVERTIBLE INSTRUMENTS AND MUTUAL SOCIETY SHARES) INSTRUMENT 2015, AS AMENDED OR REPLACED FROM TIME TO TIME.
THIS PRESS RELEASE OR INFORMATION CONTAINED THEREIN IS NOT AN OFFER, OR AN INVITATION TO MAKE OFFERS, TO SELL, EXCHANGE OR OTHERWISE TRANSFER SECURITIES IN THE RUSSIAN FEDERATION TO OR FOR THE BENEFIT OF ANY RUSSIAN PERSON OR ENTITY AND DOES NOT CONSTITUTE AN ADVERTISEMENT OR OFFERING OF SECURITIES IN THE RUSSIAN FEDERATION WITHIN THE MEANING OF RUSSIAN SECURITIES LAWS. INFORMATION CONTAINED IN THIS PRESS RELEASE IS NOT INTENDED FOR ANY PERSONS IN THE RUSSIAN FEDERATION WHO ARE NOT "QUALIFIED INVESTORS" WITHIN THE MEANING OF ARTICLE 51.2 OF THE FEDERAL LAW NO. 39-FZ "ON THE SECURITIES MARKET" DATED 22 APRIL 1996, AS AMENDED (THE “RUSSIAN QIS”) AND MUST NOT BE DISTRIBUTED OR CIRCULATED INTO RUSSIA OR MADE AVAILABLE IN RUSSIA TO ANY PERSONS WHO ARE NOT RUSSIAN QIS, UNLESS AND TO THE EXTENT THEY ARE OTHERWISE PERMITTED TO ACCESS SUCH INFORMATION UNDER RUSSIAN LAW. THE NOTES HAVE NOT BEEN AND WILL NOT BE REGISTERED IN RUSSIA AND ARE NOT INTENDED FOR “PLACEMENT” OR “CIRCULATION” IN RUSSIA (EACH AS DEFINED IN RUSSIAN SECURITIES LAWS) UNLESS AND TO THE EXTENT OTHERWISE PERMITTED UNDER RUSSIAN LAW.
IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA, THIS PRESS RELEASE IS DIRECTED ONLY AT PERSONS WHO ARE "QUALIFIED INVESTORS" WITHIN THE MEANING OF ARTICLE 2(1)(E) OF DIRECTIVE 2003/71/EC (THE "PROSPECTUS DIRECTIVE") ("QUALIFIED INVESTORS"). THIS PRESS RELEASE IS AN ADVERTISEMENT FOR THE PURPOSES OF APPLICABLE MEASURES IMPLEMENTING THE PROSPECTUS DIRECTIVE. A PROSPECTUS PREPARED PURSUANT TO THE PROSPECTUS DIRECTIVE WILL BE PUBLISHED, WHICH, WHEN PUBLISHED, CAN BE OBTAINED FROM THE TRUSTEE.