Page 79 - RusRPTMar20

8.5.1​ Fixed income - bond news
Russian natural gas major state-controlled Gazprom placed 10-year Eurobonds worth $2bn on February 20​. The company lowered the yield from the initially guided 3.625% to 3.25%, with the demand for the issue exceeding $5.5bn. Notably, Gazprom went ahead with the placement and enjoyed high demand despite ​Ukrainian Naftogaz having recently stepped up legal pressure​ on its Russian counterparts. As reported by ​bne IntelliNews,​ Gazprom was expected to issue $- and €-denominated Eurobonds​, as at end-December the company had resolved its disputes with Ukrainian Naftogaz, which had prevented Gazprom from making Eurobond placements.
Dutch-registered Yandex N.V. of Russian internet major​ ​Yandex​ will issue $1.25bn worth of exchange bonds maturing in March 2025 ​and carrying a bi-annual coupon. The bonds can be exchanged for the ordinary class A shares, at 45-50% premium to the average price on NASDAQ as of the issue. As reported by ​bne IntelliNews,​ in 2019 Yandex weathered country risks and struck a corporate governance deal with the Kremlin​, calming concerns of a state takeover of Russia's most valuable digital company. Yandex remained one of the ​preferred exposures in Russian equity​, but the company saw a fallout in the relationship with another investor darling, state-controlled bank Sberbank. The funds raised from the bond issue will be used for general corporate purposes, as well as share buyouts. Analysts surveyed by RBC note that Yandex has a solid cash position and the bond placement could indicate planned growth through acquisitions, or the recently announced construction of new headquarters.​ ​Yandex reported 4Q19 revenue growth​ of 33% year on year to RUB51.7bn ($0.8bn) under US GAAP. But the company’s Ebitda significantly decelerated its growth (to 7% from 39% in 9m19) and lagged that of revenue.
79​ RUSSIA Country Report​ March 2020 ​ ​www.intellinews.com