Page 80 - bne IntelliNews Russia Country report May 2017

last time Gazprom borrowed in CHF was in November 2016, when the company raised CHF500mn (€459mn). Gazprom in March placed GBP850mn worth of seven-year Eurobonds, yielding 4.25%. The same month Reuters also reported that the company plans to road-show a US dollar-denominated Eurobond issue in the United States. The last time Gazprom borrowed in dollars was in the summer of 2014, when it took $700mn for one year immediately after the introduction of EU sanctions against Russia for its actions in Ukraine. At the time, analysts and traders said Gazprom was trying to maintain the interest of investors after the sanctions were imposed. According to Thomson Reuters data, Gazprom has a total of $10.4bn in dollar-denominated Eurobonds outstanding. Noting the revival of Russian assets in the beginning of 2017, the Financial Times on March 8 estimated that Russian issuers in February raised almost $2.5bn through Eurobonds, whose high rates have attracted international investors.
VimpelCom, a Russian subsidiary of mobile major Veon, plans to start a roadshow for US dollar denominated Eurobonds, Prime reported on May 30, citing unnamed banking sources. The roadshow is reportedly scheduled to start on May 31 in the US and Europe, with Barclays, HSBC, ING, and JPMorgan organising the issue. Depending on market conditions, the company could place two tranches of medium-term Eurobonds. VimpelCom previously announced plans to buy out bonds maturing in 2018, 2021, and 2022 and place a new issue. The company currently has $499mn worth of Eurobonds maturing in 2018, $650mn worth of papers maturing in 2021, and $1.28bn maturing in 2022 outstanding in circulation. Moody's Investors Service on May 30 assigned a provisional (P)Ba2 senior unsecured rating to the new bonds to be issued by VimpelCom Holdings B.V, a 100% indirectly-owned subsidiary of Veon (Ba2/Stable). "The action reflects Moody's expectation that within the next 9-12 months VEON will complete the transformation of its debt/capital structure - moving to a predominantly unsecured and unguaranteed centralised group-financed model from the current subsidiary-financed model," the agency commented.
Russia's Sberbank may soon issue RUB50bn (€790mn) worth of bonds available to ordinary citizens, known as "people's bonds", the state-run lender's finance director Alexander Morozov was quoted as saying by Interfax on May 26. Morozov added that the size of specific issuances will be determined later based on demand and market conditions. "[The bonds] will be intended for a wide range of clients," he said. "I think, wealthy people will also take part." In April 2017, the Russian Finance Ministry started the placement of people's bonds through state-run banks Sberbank and VTB24.
80 RUSSIA Country Report May 2017 www.intellinews.com