CREDIT BANK OF MOSCOW optimises its capital structure with a partial cancellation of subordinated Eurobonds
12 October 2018, CREDIT BANK OF MOSCOW (the «Bank») announces partial cancellation of two subordinated loans from CBOM Finance p. l. c. financed by USD 600,000,000 7.500% p. a. loan participation notes due 2027 («CBOM’27 bonds») and USD 700,000,000 8.875% p. a. perpetual callable loan participation notes («perpetual bonds»).
Upon the partial repayment of the said loans and cancellation of equivalent amounts of the loan participation notes, 557,000,000 US dollars of the CBOM’27 bonds and 670,000,000 US dollars of the perpetual bonds remain outstanding.
Earlier, starting from August, the Bank bought back more than 100 mln US dollars in aggregate principal amount of the above mentioned bonds through a formal tender and in the open market in order to provide additional liquidity to the market amid notable volatility. As the repurchased Eurobonds were partly replaced with a new RUB 5 bln domestic subordinated bond issue offered in July, the Bank has optimised the structure of its capital and reduced its cost. Furthermore, as subordinated Eurobonds were bought back below par, the Bank locked in a profit of 14.4 mln US dollars (exclusive of coupon payment savings on the cancelled notes).
Enjoying good financial results and strong liquidity and capital positions, the Bank actively bought bonds of CBOM Finance p. l. c. for its own account during a year pursuant to its general investor relations development strategy for the period of weakening emerging markets and geopolitical uncertainty. More than 100 mln US dollars in aggregate principal amount of senior and subordinated Eurobonds were bought back through two tenders, while a comparable amount of liquidity was utilised to purchase them in the open market. Supporting its debt instruments in the secondary market amid volatility, where resources and conditions allow, will remain an important element of the Bank’s IR strategy going forward.