CREDIT BANK OF MOSCOW announces pricing of USD 500 million subordinated Eurobonds



On 25 April 2013, CREDIT BANK OF MOSCOW successfully priced a USD 500 mln 8.7% p.a. subordinated Tier II Eurobond (“The Notes”) due in 2018 (5.5 year tenor). Pricing of the Eurobond followed a series of investor meetings in Hong Kong, Singapore, Zurich, London, Boston and New York. HSBC, Raiffeisen Bank International and The Royal Bank of Scotland acted as joint lead managers and bookrunners, HSBC also being sole structuring adviser. The Notes will be issued pursuant to Rule 144a and Regulation S.

The Notes will be issued by CBOM Finance p.l.c., an SPV incorporated in Ireland for the purpose of financing a subordinated loan to the Bank. Settlement of the transaction is expected to be completed on 13 May 2013.

The transaction represents the first subordinated Eurobond issued by a Russian bank following the introduction of the Central Bank of Russia’s latest rules on subordinated capital under Regulation No. 395-P dated 28.12.2012 “On the Method of Calculating the Amount, and Assessing the Adequacy of, the Capital of Credit Institutions (“Basel III”)”.

The Notes were placed with a diverse range of international and domestic investors which included financial institutions, private banks and asset management companies. The geographical split of investors subscribing to the issue comprised: Europe (48%), Russia (39%), the United Kingdom (6%), Asia and Middle East (4%), and the USA (3%).

“Our subordinated Eurobond has extended the series of CREDIT BANK OF MOSCOW’s transactions in the international capital markets. In November 2012 the Bank raised its largest ever USD 308 mln syndicated loan provided by a group of international banks, while in January we successfully placed a USD 500 mln senior Eurobond, surpassing our previous largest single borrowing in the international markets. Today we are extremely pleased at the successful placement of our debut international subordinated issue, which has made the Bank a pioneer in the Russian banking market with regards to attracting regulatory capital under the Central Bank’s latest regulations. The transaction is also a very important step towards the Bank’s medium term objective of an IPO”, commented Vladimir Chubar, Chairman of the Management Board.

The Notes are assigned "B+(exp)" expected long-term rating by Fitch Ratings.

This is the fourth Eurobond issue and the first subordinated Eurobond for the Bank. Upon the receipt of the final approval from the Central Bank or Russia, the instrument will be included as part of the Bank’s Tier II capital base.

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