EDB raises RUB5bn

EDB raises RUB5bn

Published: May 29, 2014

Rouble deal “was not easy” says development bank's deputy chairman.

The Eurasian Development Bank, formed by Russia and Kazakhstan in 2006, has raised RUB5bn (US$144.5mn) through its latest bond issuance, a rare deal in the rouble debt market.

The order book for the deal closed at RUB9.2bn, with orders from 30 investors. The paper was priced at the bottom of a range that had already been reduced during book building, at 9.65%. The bonds have a put option allowing investors to cash-out after two years.

In a statement announcing the deal, Eurasian Development Bank deputy chairman Dmitry Krasilnikov said the issue “was not easy for the bank”.

“The continuous pressure on the rouble because of military actions in Ukraine and the relating political rhetoric have neutralised, to a significant extent, institutional investors’ interest in buying term bonds,” Krasilnikov added.

“Seventy-five percent of our issue was purchased by Russian banks, which are motivated to get out from investment quickly. Yet we managed to reach a compromise with investors by including in our issue a two-year put option, a practically zero re-subscription, and the narrowest, since the beginning of 2014, spread to the yield curve of federal loan bonds for initial placements, at 165 basis points.”

The deal was managed by Russian banks VTB Capital, Gazprombank and Sberbank CIB, alongside Raiffeisenbank, the Russian division of Austria’s Raiffeisen Bank International.