MKB placed its second senior Eurobond issue in 2021 at record low rate of 3.875%
16.09.2021
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On 14 September 2021, MKB closed successfully the book of orders for its new senior 5-year USD 500 mln 3.875% Eurobond issue.
Its coupon rate is the lowest in MKB’s entire dollar Eurobond market history and among all dollar Eurobonds issued by Russian privately-owned banks with maturities of 5 years or more.
The book building process was preceded by a series of calls with a wide array of international investors from London, Zurich and New York. Pursuant to its investor base diversification strategy, MKB also held a series of online meetings with investors from Hong Kong, Singapore and the UAE.
A productive three-day marketing in the form of online one-on-ones and group conference calls resulted in a book of orders with a wide geographical coverage: the UK (22% of final allocations), the USA (15%), Switzerland (13%), other Continental European countries (25%). The Russian investors' share is 5%. A notably strong demand also came from Asia (16%) and Middle East (4%). Almost 80% of the issue was taken up by institutional investors: funds and asset management companies. The final book saw orders of over 110 investors from 24 countries globally. Such distribution speaks of the international investment community's continuing interest in MKB’s bond issues.
The order book for the new issue opened with a initial pricing guidance of 4.25% area, but strong demand from investors resulted in an almost 3.5x oversubscription at peak, and the rate was lowered by 0.375 p.p. upon the initial guidance. The final coupon was fixed at 3.875%. The placement amount is in line with MKB’s medium-term development plans.
“This is our second deal in the Eurobond market in 2021. The current offering to a wide range of international investors lowered the bank's dollar Eurobond yield curve and lengthened its liabilities. The deal owes its unconditional success to MKB's high reputation in the international investment community, its fruitful IR work and favourable market conditions. Thus, MKB continued expanding its presence in the international debt capital markets, by consistently diversifying its investor base," – commented Vladimir Chubar, Chairman of the Management Board.
This is MKB's third Eurobond issue in the last two years. It has currently nine outstanding Eurobond issues: six issues totalling USD 2.2 bln, two issues totalling EUR 927 mln and one RUB 5 bln issue.
The Rule 144A/Reg S bonds are expected to be rated "BB" by both Fitch Ratings and Standard & Poor’s.
Citi, ING, Societe Generale and Sova Capital acted as global coordinators, while Emirates NBD Capital, Gazprombank, Raiffeisen Bank International and Renaissance Capital acted as joint lead managers and bookrunners.
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