The first ever subordinated Eurobond issued under the Bank of Russia’s new Basel 3 based requirements has been included in CREDIT BANK OF MOSCOW’s capital


27 May 2013 – On 23 May 2013, CREDIT BANK OF MOSCOW (the “Bank”) received the final conclusion from the Bank of Russia approving the USD 500 million subordinated loan received by the Bank in connection with the USD 500 million 8.7% Loan Participation Notes due 13 November 2018 issued by CBOM Finance p.l.c. (the “Notes”) as a subordinated loan eligible for inclusion into the Bank’s own funds (capital) as Tier 2 capital.

As a result of the approval, pursuant to the Bank of Russia’s Regulation No. 215-P “On the Method of Calculation of the Net Worth Capital of Credit Organisations”, the Bank’s Tier 2 capital increased by RUB 9.0 bln due to the restrictions on inclusion in additional capital of an amount exceeding 50% of a bank’s core capital. At the same time, under the Bank of Russia’s Regulation №395-P dated 28.12.2012 “On the Method of Calculating the Amount, and Assessing the Adequacy of, the Capital of Credit Institutions (“Basel 3”)”, the Bank’s Tier 2 capital increased by the amount of the entire subordinated loan proceeds equivalent to RUB 15.7 bln.

The Notes were issued on 13 May 2013. HSBC, Raiffeisen Bank International and The Royal Bank of Scotland acted as joint lead managers and bookrunners, HSBC also being the sole structuring adviser. The transaction represents the first subordinated Eurobond issued by a Russian bank, the proceeds of which have qualified as regulatory capital under Regulation No. 395-P.

Background details

CREDIT BANK OF MOSCOW was founded in 1992. It holds general license No. 1978 issued by the Bank of Russia. As at end-2012, the Bank ranked 19th largest bank in Russia in terms of total assets under RAS (RBC Rating).

CREDIT BANK OF MOSCOW is a universal commercial bank providing the full range of banking services. The Bank focuses on Moscow and the Moscow Region. The Bank has been covered by the Russian Deposit Insurance System since 2004.

85% of the shares in CREDIT BANK OF MOSCOW are held by “ROSSIUM Concern”, LLC, whose stake is beneficially owned by Mr. Roman Ivanovich Avdeev.

7.5% of the shares are held by the European Bank for Reconstruction and Development, 2.9% by International Finance Corporation (IFC) and 4.6% by RBOF Holding Company I, Ltd. (100% owned by IFC Russian Bank Capitalization Fund belonging to the same group of companies as IFC). The Bank is rated B1/B+/BB- (M/S&P/F).

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. 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 is not for public release, publication or distribution, directly or indirectly, in or into the United States (including its territories and possessions, any State of the United States and the District of Columbia). This press release is not an offer of securities for sale in the United States. Any such securities may not be offered or sold in the United States absent registration under the United States Securities Act of 1933, as amended (the “Securities Act”) or an exemption from the registration requirements of the Securities Act. No public offering of securities will be made in the United States of America or in any other jurisdiction where such an offering is restricted or prohibited. A copy of this press release may be provided to a qualified institutional buyer (as such term is defined in Rule 144A under the Securities Act) on an individual basis.

In connection with the sale of securities referred to herein, one or more parties named as stabilising manager (the “Stabilising Manager(s)”) (or persons acting on behalf of the Stabilising Manager(s)) may over allot securities or effect transactions with a view to supporting the market price of the securities at a level higher than that which might otherwise prevail. However, there is no assurance that the Stabilising Manager(s) (or persons acting on behalf of the Stabilising Manager(s)) will undertake stabilisation action. Any stabilisation action may begin on or after the date on which adequate public disclosure of the terms of the offer of the securities is made and, if begun, may be ended at any time, but it must end no later than the earlier of 30 days after the issue date of the securities and 60 days after the date of the allotment of the securities. Any stabilisation action or over allotment must be conducted by the relevant Stabilising Manager(s) (or persons acting on behalf of such Stabilising Manager) in accordance with all applicable laws and rules.

The information contained herein is not an offer, or invitation to make offers, to sell, exchange or otherwise transfer or dispose of the securities referred to herein (as part of their initial distribution or at any time thereafter) in the Russian Federation or to, or for the benefit of, any persons (including legal entities) resident, incorporated, established or having their usual residence in the Russian Federation, or to any person located within the territory of the Russian Federation, unless and to the extent otherwise permitted under Russian law and does not constitute an advertisement or offering of the securities in Russia within the meaning of Russian securities laws and must not be passed on to third parties or otherwise be made publicly available in Russia. The securities referred to herein have not been and will not be registered in Russia or admitted to public placement or public circulation in Russia and may not be "offered", "placed" or "circulated" to any person in the Russian Federation unless otherwise permitted under Russian law.