Russian oblast places RUB3bn bond

Russian oblast places RUB3bn bond

Published: November 29, 2012

VTB acts as general agent on Sverdlovsk bonds following St Petersburg deal earlier in month. 


Russia’s second-largest bank, VTB, was the general agent and technical underwriter of a RUB3bn (US$969mn) bond placement by the government of the Sverdlovsk Oblast. Time to maturity is fixed at just under 5 years.

The Sverdlovsk regional government has resolved to sell its bonds with fixed coupon profit and debt amortisation. As a result, all purchase offers had to be tendered between 10am and 4pm on November 27.  Sales will be settled on December 5.

The Sverdlovsk Oblast is located on the eastern slopes of the Urals Mountains. It is rich in iron, copper, gold and platinum and accounts for 12% of Russia’s iron and steel industry. It is also an important regional road, rail and air hub.

The deal comes two weeks after the city of St Petersburg issued RUB7bn of debt due to mature in 2017. The bonds were rated by Moody’s Interfax, in light of the city’s comparatively well developed economy, strong operating surplus and light debt burden. VTB Capital, the investment banking arm of VTB, was a co-arranger on that transaction.

Krasnodar Krai, near the Black Sea, has had its recent RUB12bn bond issuance rated by Moody's Interfax. The region has demonstrated resilience to economic shocks and has benefited from infrastructure improvements in the run-up to the 2014 Winter Olympic Games, to be held in the City of Sochi.