7 February 2018, CREDIT BANK OF MOSCOW, one of the largest Russian privately-owned banks, closed successfully the book of orders for its new senior 5-year USD 500 mln 5.55% Eurobond issue. Its coupon rate became the lowest in the Bank’s entire Eurobond market history and among all 5-year Eurobonds issued by Russian privately-owned banks. This Eurobond issue also became the first Reg S/Rule 144A notes placed publicly by a privately-owned Russian bank in this year.
The deal book represents overwhelmingly international demand coming from a wide circle of investors, including funds, asset management companies, private banks and financial institutions. Geographically, orders were sourced from the UK (32%), the USA (30%), continental Europe (23%), Russia (14%) and Asia (1%). In total, more than 100 orders were received from 17 countries of the world. The book building process was preceded by a series of meetings with institutional investors in Zurich, London, New York and Boston.
As the deal was oversubscribed by almost three times, the coupon rate was lowered by more than 0.4 pp against the upper notch of the initial price guidance, confirming investors’ increased appetite for the Bank and its stainless reputation in the international capital market.
«We are happy with the placement’s parameters, — commented Vladimir Chubar, Chairman of the Management Board. — Despite a drastic drop of the U.S. stock market a few days before the closing and despite increased volatility, we made the right choice when decided to proceed as planned initially as the market opened in the „green zone“ and investors’ demand was strong, evidencing their confidence in the quality of the Bank’s investment story, management and strategy. I express particular gratitude to the Bank’s team and bookrunners for their professionalism and well-coordinated work».
It is the Bank’s fourth issue of loan participation notes in the last 18 months after the successful placement of a senior Eurobond in autumn 2016, and subordinated (Tier II) Eurobond and debut subordinated perpetual Eurobond in spring 2017. The aforesaid issues total USD 2.3 bln while USD 1.3 bln were included in the Bank’s Tier I and Tier II capital. Thus being the leader in the Russian banking sector in 2017 in terms of the size and number of public funding exercises in the international capital markets, this year the Bank keeps on strengthening its positions.
The notes are to be issued via an SPV, CBOM Finance p.l.c., for the purpose of financing a loan to the Bank. The deal is to be settled on 14 February 2018. The Eurobond is expected to be rated «BB-» by Fitch Ratings, «BB-» by Standard & Poor’s and «Ba3» by Moody’s Investors Service.
Credit Suisse, J.P. Morgan and SG CIB acted as global co-ordinators, and ING, Sova Capital, REGION Broker Company and Unicredit Bank acted as joint lead managers and bookrunners.
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