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CREDIT BANK OF MOSCOW successfully placed $500 mln Eurobond

07.11.2016

27 October 2016, CREDIT BANK OF MOSCOW placed USD 500 mln 5-year 5.875% senior unsecured Eurobond due 2021 on the Irish Stock Exchange.

The placement was preceded by a series of meetings with investors in Zurich, Geneva, London, Boston and New York. The book covers institutional investors (51%), banks (44%) and private banks (5%). This issue is noteworthy for being the first Eurobond issue since 2014 actively marketed in the USA by a Russian bank and subscribed by well-known US investment funds.

International investors contributed almost one half of the order book with the following geographical distribution: Russia 52%, Europe 24%, UK 12%, USA 8%, Asia 4%. Final distribution of the new issue features a notably high share of international accounts and institutionals for a Russian Eurobond placement, with split similar to that seen on offerings of Russian corporates in 2016.

The book was opened with price guidance "high 5%s", but due to strong demand resulting in a 1.6-time oversubscription, the final coupon rate was reduced and fixed at 5.875%. Furthermore, despite the growing yields on US treasuries in October turning international investors away from emerging markets, the Bank’s new Eurobond issue was placed with a zero premium to its interpolated senior curve.

This 5-year Eurobond issue became the longest-term one among similar instruments issued by Russian banks since mid-2014. Its size is also noteworthy for outstripping recent similar transactions of privately-owned Russian banks.

The Eurobonds were rated "BB" by Fitch Ratings and "BB-" by Standard&Poor's.

The Eurobonds were placed under Rule 144a and Regulation S by CBOM Finance p.l.c., an Irish special purpose vehicle, for the purposes of financing a loan to the Bank. Citigroup, Société Générale and Sberbank CIB acted as joint lead managers and bookrunners. REGION Brokerage Co was a co-manager of the issue.