Russian Bank thinking about the first major issue in 2016


The Bank “Opening” on September 7, will meet with investors in Europe and Asia over the placement of Eurobonds, writes Bloomberg citing two sources. This was confirmed by a source in banking circles.

Global coordinators of the upcoming transaction assigned to Societe Generale CIB and Citibank, follows from the materials of the Bank for the investors consulted . Joint lead managers and bookrunners Citibank, Commerzbank, ING, Raiffeisen Bank International, UniCredit and VTB Capital”.

“We consider this placement as an opportunity to diversify funding sources and reduce the cost of borrowed funds”, — said senior Vice-President of Bank “Open” Yuri Lekarev, noting that the decision on the placement and settings will be determined following the meetings.

In 2018, the Bank “Opening”, completed in August, the legal procedure of accession “Khanty-Mansiysk Bank OTKRITIE” to the Bank “FC Opening”, there is a repayment of Eurobonds in the amount of $500 million and Therefore the placement can be to roughly the same amount — $500 million, says analyst “URALSIB capital” Dmitry Dudkin. The accommodation will be among a wide range of participants, and its volume can be as high as $500 million, agrees the analyst of “Aton” Yakov Yakovlev.

The yield on Eurobonds of Russian issuers is on a three-year low, and this is a good way to obtain additional resources for issuers, emphasizes Dudkin. “Now the average yield on Bank five-year bonds is around 4%,” he adds.

Demand will be high, including due to the shortage of supply by the Russian banks, emphasizes the analyst PSB Dmitry Monastyrshin. “State banks don’t come with new issues because of the sanctions. Private banks are showing low activity in the absence of the need for foreign exchange liquidity. Moreover, issuers in 2015 and 2016, preferred to buy back their traded Eurobonds were traded below par,” notes the analyst.

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This year Eurobonds among Russian banks placed the Bank that issued paper of $150 million for three years, “Renaissance Capital — $200 million with five years maturity. About the plans for a so-called perpetual Eurobonds for $300 million in June, said Alfa-Bank, but he later abandoned the transaction.

The last major issues were last year — in November Alfa-Bank has placed Eurobonds in the amount of $500 million with a yield of 5%, Monastyrshin speaks. “Now the issue is trading above par, and paper can be bought with a yield of 2.9 to 3.11%,” he adds.

The presence of high interest to Eurobonds of Russian issuers of the financial sector confirms implemented in July, the placement of Eurobonds STLC in the amount of $500 million, reminds Monastyrshin. Demand for the issue totaled about $2.5 billion, five times higher than the borrowed volume, he said. “The placement took place with a yield of 5.95%, and now on the secondary market paper, you can buy only above par with a yield of 5.2% per annum”, — cites Monastyrshin.

According to Dudkin, the transaction is “Open” may encourage other banks to placements, however, the market has been a relative stabilization.

FK “Opening” one of the ten largest banks. According to “Interfax-CEA”, it ranks fifth in terms of assets (2.75 trillion rubles). “Khanty-Mansiysk Bank Open” is an 18-th place by assets (462 bn).

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