Russian Railways successfully placed Rouble Eurobond
In October 2017, JSC “RZD” successfully placed a RUB-denominated Eurobond
in line with the Company’s borrowings policy for 2017. Ahead of the deal the
Company conducted the 3-day roadshow in Moscow and London that included both group
events and 1-on-1 meetings with key investors. The Notes were issued in RegS only
format by RZD Capital P.L.C. (Ireland) as an issuer and have the sole purpose of financing
its loan to JSC “RZD”.
Pricing of RUB 15bn 7-year Eurobond transaction took place on 12 October 2017.
Strong demand from both international and local investors resulted in the book reaching
RUB 40bn. As a result the pricing tightened from IPTs of 7.9-8.0% to the final yield
of 7.90% - 35bps inside the Issuer’s most recent Local bond issue of comparable
tenor. The issue was priced at a spread of 53 bps to the OFZ curve, 7 bps inside the
historic secondary levels. The new issue further extends RZD’s liquid Euro-Rouble
secondary curve, firmly established as the market’s premier corporate benchmark
Geographical split of demand for the new issue confirms strong interest for the
Company’s debt instruments from international investors: they accounted for
40% of final allocations, with majority from the UK.
With the new issue JSC “RZD” achieved the lowest rouble coupon for
the Company’s RUB Eurobonds ever as well as the lowest coupon for any Russian
borrower on international debt markets since January 2013. RZD’s fourth rouble-denominated
Eurobond placement takes the total amount of the Company’s international RUB
debt outstanding to 82.5 billion.
The transaction was lead managed by Barclays, Sberbank CIB and VTB Capital.
The securities referred to herein are not registered under the U.S. Securities
Act of 1933, as amended, and may not be offered or sold in the United States absent
registration or an exemption from registration under the U.S. Securities Act of 1933,
This communication and information contained herein does not constitute an advertisement
of any securities, or any other kind of advertisement, or an offer to buy securities
or invitation to submit offers to purchase securities, in the Russian Federation.