NewsRSS

MKB placed its second senior Eurobond issue in 2021 at record low rate of 3.875%

16.09.2021

Not for release, publication or distribution, directly or indirectly, in whole or in part, in or into the United States of America (except to qualified institutional buyers, as defined in Rule 144A under the US Securities Act of 1933 (the “Securities Act”) that are also qualified purchasers as defined in section 2(a)(51) of the US Investment Company Act of 1940), Australia, Canada, Japan or any other jurisdiction where to do so would be unlawful. This announcement does not constitute or form a part of any offer or solicitation to purchase or subscribe for securities in the United States or in any other jurisdiction.

+++

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.

 

+++

The securities to which this announcement relates have not been and will not be registered under the Securities Act and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons (as such term is defined in Regulation S under the Securities Act), except pursuant to registration or an exemption from the registration requirements of the Securities Act. There will be no public offer of securities in the United States.

This announcement does not constitute or form part of an offer or invitation to sell or issue, or any solicitation of an offer to buy or subscribe for, any securities, in the United States or any other jurisdiction nor shall it (or any part of this announcement) or the fact of its distribution form the basis of, or be relied upon in connection with, or act as any inducement to enter into, any contract or commitment or investment decision whatsoever. The distribution of this announcement in certain jurisdictions may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This announcement or information contained therein is not an offer, or an invitation to make offers, to sell, exchange or otherwise transfer securities in the Russian Federation to or for the benefit of any Russian person or entity and does not constitute an advertisement or offering of securities in the Russian Federation within the meaning of Russian securities laws. Information contained in this announcement is not intended for any persons in the Russian Federation who are not “qualified investors” within the meaning of article 51.2 of the Federal Law No. 39-FZ “On the Securities Market” dated 22 April 1996, as amended (the “Russian QIS”) and must not be distributed or circulated into Russia or made available in Russia to any persons who are not Russian QIS, unless and to the extent they are otherwise permitted to access such information under Russian law. The securities referred to herein have not been and will not be registered in Russia and are not intended for “placement” or “circulation” in Russia (each as defined in Russian securities laws) unless and to the extent otherwise permitted under Russian law.

This announcement is directed only at and is for distribution only to persons in the United Kingdom who are (i) “investment professionals” falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the “Order”), (ii) persons falling within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations etc.”) of the Order or (iii) other persons to whom an invitation or inducement to engage in investment activity (within the meaning of the Financial Services and Markets Act 2000) in connection with the issue or sale of any shares may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as “Relevant Persons”).

A rating is not a recommendation to buy, sell or hold securities and may be subject to revision, suspension or withdrawal at any time by the assigning rating organisation. Similar ratings for different types of issuers and on different types of securities do not necessarily mean the same thing. The significance of each rating should be analysed independently from any other rating