Russian agricultural Bank (Rosselkhozbank) will issue a ten-year structural bonds for 10 billion rubles according to the Bank presentation for investors (have), Rosselkhozbank focused on the yield of 11.75 to 12.75% per annum, while the underlying asset on the securities will be bonds of other Bank — Peresvet. The issue meets the criteria for investment of pension savings NPF, emphasized in presentations to investors. Key investors, which calculates Rosselkhozbank, is a non — governmental pension funds, management companies and banks, said in a presentation.
The layout is as follows: RAB issues its own bonds, the funds from which will be used to redeem bonds, which in turn will release the Bank “Peresvet”. In addition, part of the funds, as noted in the presentation, will be used to purchase OFZ yield which should provide the structural holders of the bonds of Rosselkhozbank the safety of their investment.
Last week in St. Petersburg, the management of Rosselkhozbank and the Bank “Peresvet” has held a meeting with investors, among whom were several representatives of private UK and NPF. The invitation was received by a UK, management of pension money. “This is an interesting proposal, given that the same paper the agricultural traded with a yield of 10-11,5% per annum, but it is necessary to assess all the risks of this instrument,” — said the Manager of investment company, received a letter from Rosselkhozbank. According to the Director of the Department of debt capital markets at ROSBANK Anton Kiryukhin, formally, the structural issue of the bonds will have a rating of Rosselkhozbank, which is significantly higher than the Bank “Peresvet”. According to the scale of international rating Agency Fitch credit rating of Rosselkhozbank corresponds to BB+, the rating of the Bank “Peresvet” is at b+. “However, investors will have to analyze these bonds as a mix of the two instruments and to assess the risks based on the net present value of the payments of coupons and face value, understanding that is actually a portion of the risk, about 50-60% will account for risk on the Bank “Peresvet” and the rest for the agricultural Bank”, — says Kiryukhin.
Head of asset management fixed income, TKB BNP Paribas investment partners” Igor Kozak believes that the Bank “Peresvet” there is a need to attract long-term money and reduce the cost of funding. The Bank’s bonds are now traded with a yield of about 14% per annum. Just the appeal of the Bank are eight bond issues in the amount of RUB 24.6 billion In tandem with Rosselkhozbank, the Bank will pay a lower premium than if placed their bonds on the market. Most likely, the issue will be sold in the format of “placing in one hand,” — said the financier. While Kozak did not rule out that buyers of structural bonds can be NPF: what is needed, therefore an Issuer with a higher rating.
Projects Bank of the ROC
According to estimates Kiryukhin, taking into account the yield offered to investors, and guarantees preservation of the par value of the investment, the participation in the transaction will allow the Bank “Peresvet” to raise from 5 billion to 6 billion rubles from Rosselkhozbank. “It is clear that the Bank of such level it is difficult to obtain financing for such a long time. Typically, banks with such ratings attract in the debt market money not more than two or three years,” he said. The analyst of Agency RusRating” Larisa Makarenko believes that the funds could require the Bank “Peresvet” on long-term projects. “From the point of view of liquidity and capital we do not see from him any problems,” she said.
As previously wrote , the Bank “Peresvet” is a co-owner of “agro-culture Group, which invests in greenhouses for growing cucumbers and tomatoes. Also Peresvet invests in innovative projects across the company “Sberinvest”, in which the Bank owns 18.8 per cent. Innovation financing equity: 50% of the money give the investors “Sberinvest” (including “Relight”), 50% — state corporations and funds. Funds for the projects co-financed “Sberinvest”, found in the Russian venture company, SKOLKOVO Fund and state Corporation “RUSNANO”.
Kiryukhin doubt that investments in OFZ yields which are now below 9% annually, will provide one hundred percent repayment of funds investors. “In addition, Rosselkhozbank as the Issuer carries and interest rate risk. As a percent of Rosselkhozbank plans to pay not in the form of regular coupons, but at the end of the term, regular payments from the assets, to be invested funds raised must be reinvested at rates which are current at the time of receipt of such payments. Given the expectation of lower rates in the market, to do so, to provide the necessary bond yields will be problematic,” — said Kiryukhin.
The transaction is expected to be held in late June 2016, according to a source close to the organizers of the placement. Rosselkhozbank and the Bank “Peresvet” has not responded to the request .
Russian agricultural Bank is among the top 10 largest banks by asset, 100% of the shares owned by Rosimuschestvo. The Bank’s assets on may 1, 2016 amounted to 2.66 trillion rubles By the end of 2015, the agricultural loss under IFRS amounted to 94.2 billion rubles, an increase compared to the 2014 half. Over the Bank in 2016 showed a loss of 69.2 billion rubles in the first quarter of its 2016 financial result was positive: the Bank earned RUB 4.3 billion net profit.
Bank “Peresvet” is among the 50 largest banks with assets 188,4 billion RUB (as of may 1, 2016). Its main owner, according to on March 31, is the Russian Orthodox Church, which owns 49.7% of shares. Of 24.35% shares owned by JSC “Expocentre”, the main shareholder is the chamber of Commerce. By the end of 2015, the Bank showed a profit of 3.8 billion (IFRS).
As previously wrote , “Peresvet” is the main Bank for the ROC. In his accounts as of may 1, 2015 placed funds of enterprises and organizations (80,75 bn) and individuals (22.2 billion rubles).