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MKB opens season by issuing EUR600mm Eurobonds with a record-low coupon

15.01.2021

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On 13 January 2021, Credit Bank of Moscow (MKB) reopened the Eurobond market for Russian and CIS issuers by successfully placing a EUR600mm 5-year senior Eurobond offering at 3.1% coupon.

 

Its coupon rate is the lowest ever for a 5yr+ deal by a sub-investment-grade rated financial institution from the CEEMEA region. On top of that, this is the largest ever private sector EUR-denominated bond offering from Russia.

 

Prior to launch of the offering MKB held a productive two-day  in the format of online one-on-ones and group conference calls covering more than 50 investors from Asia, Middle East, Continental Europe, the UK and the USA.

 

The strongest interest was shown by investors from Continental Europe (30%). The wide international demand was underpinned by investors from the UK (20%), Switzerland (12%), the USA (7%), and Southeast Asia, Middle East and Latin America (2%). Russian and CIS investors' share was 29%.

 

A particularly noteworthy feature is the extensive geographic diversification of orders, with a notable share coming from the US, the Middle East, Asia and Latin America - regions that rarely pay attention to euro-denominated issues. Another notable feature of the deal was the broad diversification of the order book, with a significant volume of demand from clients of international private banks and wealth management firms.

 

The order-book peaked above EUR 1.1 bln, allowing MKB to fix the coupon rate at 3.1% – i.e. 40 bps below the initial price guidance – and to upsize the issue from the initially planned EUR500mm to EUR600mm.

 

"We are happy to start the year on a high note with a successful Eurobond offering. This deal benefited from our consistent efforts to keep close relationships with key international investors, who appreciated the bank's performance in a challenging 2020. This offering enables the bank to improve its funding currency mix , extend its debt maturity profile and diversify its investor base. We are content with the deal results and express our gratitude to our investors," – commented Vladimir Chubar, Chairman of the Management Board.

 

The bonds will be issued under Rule 144A and Regulation S under the US Securities Act of 1933. The Eurobonds are expected to be rated BB by Fitch Ratings and BB- by Standard & Poor’s.

 

Citi, J.P. Morgan and Société Générale acted as Global Coordinators, while BC REGION, Emirates NBD Capital, Renaissance Capital, Sova Capital and Sovcombank acted as Joint Lead Managers and Bookrunners.

 

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