Page 16 - bne_April 2021_20210401

16 I Companies & Markets bne April 2021
Telegram messenger places $1bn of bonds
IntelliNews Pro
The Telegram messenger app of Russian internet
guru Pavel Durov raised $1bn from the placement of exchange bonds yielding 7% annually, RBC business portal reported on March 15 citing unnamed investors that participated in the offering.
As covered in detail by bne IntelliNews, Durov had already raised $1.7bn from the biggest ICO (Initial Coin Offering) in history to fund the development of his Telegram Open Network (TON) blockchain.
But he later abandoned the project due to objections by the Securities and Exchange Commission (SEC), which said the sale of its GRAM coins was the sale of an unregulated security. After that, Telegram was searching for debt financing for its development.
Reportedly, the latest bonds mature in 2026, with the minimum offering at $0.5mn. The bonds are exchangeable for equity in the case of a possible IPO at 10% discount.
The placement was reportedly organised by VTB Capital (VTBC) and Aton, as well as by Alfa Capital. However, given the small number of investors the placements were direct and involved no underwriting.
Previously Forbes claimed that the book for the bonds was oversubscribed two-fold, with the offering possibly expanded to $1.5bn. However, the analysts surveyed by RBC believe that the demand was moderate, given the final yield of 7%.
The analysts also agree that the possibility to participate in the future IPO of Telegram is the main driver of demand for the bonds, even without a clear monetisation strategy for the messenger.
Central Asia bond review
Maximilian Hess in London for EurasiaNet
Debt has been a key feature of Central Asia’s integration into the world economy in recent years. Chinese financing has attracted the most attention, little of
it positive. But borrowing from Western capital markets, particularly in the form of tradable loans issued abroad and denominated in hard currencies (known as eurobonds),
has highlighted key differences in the post-Soviet republics’ development 30 years after independence.
Uzbekistan is the poster child for these efforts, opening up dramatically since the death of President Islam Karimov in 2016 and being embraced by lenders. Tajikistan is proving more of a cautionary tale – both for the indebted government and its weary investors.
Tashkent’s triumph
In February 2019, two Western-educated bankers with extensive experience abroad – Atabek Nazirov of the Capital Market Development Agency and Deputy Finance Minister
www.bne.eu
Odilbek Isakov – oversaw the issuance of Uzbekistan’s first-ever sovereign eurobonds, raising $1bn. The debt has performed extremely well. Half was issued in a 10-year bond that now trades at nearly 113 cents-on-the-dollar.
As bond prices rise, their effective yield goes down. Investors at issuance were promised annual interest payments of 5.375%, but the current effective yield is just 3.5% – meaning the cost of borrowing has fallen for Tashkent.
That November, Uzbekistan’s state-owned Sanoat Qurilish Bank (also known as Uzpromstroybank) followed suit, issuing a $300mn eurobond.
Uzbekistan was not immune to the COVID-19 pandemic, of course, and the March 2020 selloff in emerging-market debt saw the sovereign eurobond fall 24% (from 112 cents on the dollar to 85 cents) in just three weeks. It now trades at around 113 cents, having steadily recovered throughout the second