Page 104 - RusRPTNov20

highest level of investor interest in its eurobonds since 2013. Some 220 investors signed on for the US dollar issue, while 170 took part in the euro issue.
Qiwi​ priced its debut 3Y RUB5bn bond issue (denominated in rubles) on Friday, 9 October, ​with the coupon fixed at 8.4% per year. The placement was 3.5x oversubscribed, according to Qiwi. The placement should be formally completed tomorrow, 13 October. According to Qiwi, the cash raised will finance the development of “a number of projects”. At the same time, the company "does not rule out M&As in the future”, according to an unnamed source quoted by Interfax. We view the placement as a major signal of Qiwi's determination to expand its SME factoring business. According to management statements during the 2Q20 earnings call in August, the factoring book was expected to increase to RUB7.5-8bn by YE20, up from RUB3.3bn in 2Q20. Qiwi's factoring sub-segment had net profit of RUB94mn in 2Q20; however, net profit might visibly decline in 4Q20-1Q21 if the interest expense on bonds is allocated to the segment's results. As we understand, the provision expense on the factoring book has been negligible so far, but this might change because of the second wave of COVID-19 in Russia, which threatens SMEs more than mid-sized or large corporates, we think.
104 ​RUSSIA Country Report​ November 2020 www.intellinews.com