Page 13 - FSUOGM Week 43

FSUOGM INVESTMENT FSUOGM

Gazprom raises $2.6bn from

eurobond sales

RUSSIA RUSSIA’S state-owned gas supplier Gazprom global co-ordinators and bookrunners for the
has raised almost $2.6bn from the issue of per- placements, while Credit Agricole Corporate
Perpetual bonds do not petual eurobonds, it reported on October 27, in and Investment Bank and Sberbank CIB acted
have a maturity date a bid to refinance some of its debt. as joint lead managers and bookrunners.
and are thought of more Gazprom has been hit hard by the slump in “The eurobond market has once again shown
as a type of equity than gas demand this year triggered by the coronavi- significant appetite for Gazprom debt, incre-
debt. rus (COVID-19) lockdowns, with its net income mentally lowering the company’s average inter-
almost halving in the second quarter on the back est rate and ensuring it has the flexibility to both
of lower prices and much weaker sales to Europe. pay dividends and finance core capital,” BCS
Its net debt had ballooned to RUB3.68 trillion Global Markets (BCS GM) said in a research
($53bn) by the end of June, up 16% from six note earlier this month.
months earlier because of a crash in the ruble's “Considering a high investor interest in
value. hybrid instruments, Gazprom is looking at the
Gazprom said in a statement it had placed possibility of placing in the Russian market
$1.4bn in US-denominated notes and some the first perpetual subordinated bond issue in
€1bn ($1.2bn) in euro-denominated bonds. rubles,” the company said.
Demand for the bonds exceeded $7.4bn, it said, NewsBase reported in late September that
noting this marked the highest level of investor Gazprom was looking to raise RUB150bn in
interest in its eurobonds since 2013. Some 220 ruble-denominated perpetual bonds to finance
investors signed on for the US dollar issue, while its regional gasification programme.
170 took part in the euro issue. Gazprom has endured a difficult year in
Perpetual bonds do not have a maturity Europe, where the impact of the COVID-19 cri-
date and are thought of more as a type of equity sis has been compounded by increased competi-
than debt. On the one hand they offer investors tion from LNG suppliers and high levels of gas in
a steady flow of interest, but on the other, they storage. The company expects to ship 165-170bn
cannot be redeemed. The dollar bonds had a cubic metres of gas to the continent this year, the
coupon rate of 4.6%, while the euro bonds had head of its export arm, Elenea Burmistrova, told
a rate of 3.9%. reporters this week. Its sales price is expected to
Gazprombank subsidiary Bank GPB Inter- average $120-130 per 1,000 cubic metres, she
national and JP Morgan Securities acted as joint said. ™

Week 43 28•October•2020 www. NEWSBASE .com P13