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23.06.2020   15:33

Russian Railways Is the First Russian Corporate Borrower to Offer Perpetual Bonds on Local Market

On June 22, Russian Railways (corporate ratings BBB/Baa2/BBB- / ruAAA/AAA (RU) (Fitch/Moody's/S&P/Expert RA/ACRA) successfully priced the first issue of perpetual bonds, series 001Б-01.The local rating agency ACRA assigned the issue rating at the level еAA+(RU) taking into account the coupon reimbursement approved by the Government of Russian Federation in accordance with the order No.1260-r as of 13May 2020.

During the bookbuilding that took place from 11:00 on June 19, 2020 to 15:00 on June 22, 2020, the strong investor demand reflected in the over-subscription twice of the final size. This allowed to successively reduce the benchmark coupon rate from 7% to the final rate of 6.55% and increase the size of the issue 2 times: first from 15 billion rubles to 20 billion rubles, and second to the final size of 30 billion rubles.

Prior to the book opening, the issue was included in the international clearing system Euroclear, allowing foreigninvestors to participate in the transaction. The highest demand came from the banks who took over 80% of theissue. The rest of the amount was allocated between pension funds and asset managers.

Finally the book was closed with a coupon rate of 6.55% for a 30 billion rubles transaction (or OFZ + 1.55%). The settlement on the Moscow Exchange (MOEX) is planned for June 26, 2020.

The funds received will be used to finance the investment program of Russian Railways.

The issue was arranged by Credit Bank of Moscow, VTB Capital, and Sberbank CIB. The settlement agent is VTB Capital.