CREDIT BANK OF MOSCOW has closed Eurobond deal order book at lowest rate ever


7 February 2018, CREDIT BANK OF MOSCOW, one of the largest Russian privately-owned banks, closed successfully the book of orders for its new senior 5-year USD 500 mln 5.55% Eurobond issue. Its coupon rate became the lowest in the Bank’s entire Eurobond market history and among all 5-year Eurobonds issued by Russian privately-owned banks. This Eurobond issue also became the first Reg S/Rule 144A notes placed publicly by a privately-owned Russian bank in this year.

The deal book represents overwhelmingly international demand coming from a wide circle of investors, including funds, asset management companies, private banks and financial institutions. Geographically, orders were sourced from the UK (32%), the USA (30%), continental Europe (23%), Russia (14%) and Asia (1%). In total, more than 100 orders were received from 17 countries of the world. The book building process was preceded by a series of meetings with institutional investors in Zurich, London, New York and Boston.

As the deal was oversubscribed by almost three times, the coupon rate was lowered by more than 0.4 pp against the upper notch of the initial price guidance, confirming investors’ increased appetite for the Bank and its stainless reputation in the international capital market.

«We are happy with the placement’s parameters, — commented Vladimir Chubar, Chairman of the Management Board. — Despite a drastic drop of the U.S. stock market a few days before the closing and despite increased volatility, we made the right choice when decided to proceed as planned initially as the market opened in the „green zone“ and investors’ demand was strong, evidencing their confidence in the quality of the Bank’s investment story, management and strategy. I express particular gratitude to the Bank’s team and bookrunners for their professionalism and well-coordinated work».

It is the Bank’s fourth issue of loan participation notes in the last 18 months after the successful placement of a senior Eurobond in autumn 2016, and subordinated (Tier II) Eurobond and debut subordinated perpetual Eurobond in spring 2017. The aforesaid issues total USD 2.3 bln while USD 1.3 bln were included in the Bank’s Tier I and Tier II capital. Thus being the leader in the Russian banking sector in 2017 in terms of the size and number of public funding exercises in the international capital markets, this year the Bank keeps on strengthening its positions.

The notes are to be issued via an SPV, CBOM Finance p.l.c., for the purpose of financing a loan to the Bank. The deal is to be settled on 14 February 2018. The Eurobond is expected to be rated «BB-» by Fitch Ratings, «BB-» by Standard & Poor’s and «Ba3» by Moody’s Investors Service.

Credit Suisse, J.P. Morgan and SG CIB acted as global co-ordinators, and ING, Sova Capital, REGION Broker Company and Unicredit Bank acted as joint lead managers and bookrunners.

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities in the United States or any other jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction. The securities referred to in this press release have not been and will not be registered under the Securities Act and, subject to certain exceptions, may not be offered or sold within the United States. The securities referred to in this press release are being offered and sold outside the United States in reliance on Regulation S under the Securities Act («Regulation S») and within the United States to «qualified institutional buyers» (as defined in Rule 144A) («QIBs»).

This press release may only be communicated, or caused to be communicated, to persons in the United Kingdom in circumstances where section 21(1) of the FSMA does not apply and may be distributed in the United Kingdom only to persons who (i) 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 (as amended) (the «Order») or (ii) are persons falling within Article 49(2)(a) to (d) («high net worth companies, unincorporated associations etc.») of the Order (all such persons together being referred to as «Relevant Persons»). In the United Kingdom, this press release is directed only at Relevant Persons and must not be acted on or relied on by persons who are not Relevant Persons.

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.

This press release or information contained therein is not an offer, or an invitation to make offers, sell, purchase, exchange or transfer any securities in the Russian Federation to or for the benefit of any Russian person or entity and does not constitute an advertisement of offering of any 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 («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.