In the first such move since sanctions from the United States government were removed earlier this year, Russian Federation aluminium titan U.C. Rusal announced the successful placement of a ruble bond on the Moscow Exchange.
Rusal’s ruble-based bond placement consisted of a 10-year term with a 3-year put option. The bond’s nominal value was ₽15 billion (US$231 million) with a coupon rate of 9 percent per annum, which was fixed at the lower level of the initial price guidance.
Per Rusal, the bond garnered the attention of a wide swath of investors, both institutional and private. To date, private investors placed 45 orders for the bond, helping it to close the book at the lower end of the initial price guidance.
In addition, thanks to an oversubscription of almost double the initial offering, Rusal was prompted to increase the amount offered from the initial ₽10 billion. The spread of Rusal’s bonds to the yield curve of Russian Government Bonds (OFZ) was lowered by almost three times compared to the firm’s 2016 issuance, and it was fixed at 135 basis points.
“RUSAL has successfully returned to its practice of raising capital on the financial markets,” explained Rusal’s Director for Strategy, Business Development and Financial Markets Oleg Mukhamedshin.
“We are glad that investors remained confident and demonstrated a significant interest to the Company that continuously invests funds in the long-term projects and develops the production of “green” aluminium, further enhancing technological base and strengthening relationship with end consumers across various industries.”
The settlement, which is scheduled for Monday, is the firm’s first since a US$500 million Eurobond issuance in January 2018. The most recent bond issuance on the Russian market was three years ago.
The bond will be issued by OJSC RUSAL Bratsk and managed by BCS Global Markets, VTB Capital, Gazprombank, Credit Bank of Moscow, Bank Otkritie Financial Corporation, and Region BC. Gazprombank is the bond’s settlement agent.