Russian Federation aluminium titan UC Rusal announced the pricing of its first-ever Eurobond this week.
The US$600 million bond has a maturity term of five years at a 5.125% rate of return. Rusal says the proceeds of this bond issue will be used to refinance its indebtedness.
According to a source familiar with the deal, the vast majority (80.5%) of investors are from outside Russia’s borders, which makes it a unique investor structure for the country. Investors from continental Europe are the biggest single group (27%), followed by domestic investors (19.5%), investors from the United States (19%), the United Kingdom (17.5), Asia (15.5%), and the Mideast (1%).
Of the fund’s 168 investors, mutual funds account for the lion’s share (65%), with banks (27.2%) and other investors (7.8%) comprising the remainder. The bond issue proved extremely popular with investors as well – the demand was double the amount of bonds offered, and the book fully balanced in the course of the allocation process, the source added.
“We are delighted to win overwhelming support for our debut Eurobond issue from a wide group of global investors,” said Rusal’s CEO Vladislav Soloviev. “We have opened a new market for borrowing. The success of this transaction further strengthens the Company by diversifying our sources of funding and improving our debt maturity profile.”