Page 148 - RusRPTJun24

according to Renaissance Capital. RenCap believes that the US dollar was preferred by Novatek over Chinese yuan “is probably a preference of the anchor investor (or group of investors)”. “Since Russian banks in the current environment are sellers rather than buyers of assets in "unfriendly" currencies, it can be assumed that the order book for the issue was formed at the expense of non-banking investor groups,” the analysts argue. Novatek’s US dollar issue could be followed by other companies with large short-term refinancing needs. Aluminium major United Company Rusal (one of the main Chinese yuan bonds issuer in Russia) has already announced the placement in the first half of June of a 3-year dollar-linked bond issue with a volume of at least $100m. and a coupon benchmark of 8.00-8.25%. However, to RenCap analysts the purpose of Novatek's placement is “not entirely clear”. At the end of 2023, Novatek had zero net debt with total debt of about $1.8bn and little short-term debt. This is excluding the debt of the Yamal LNG in which Novatek has 50.1% stake, and which had total debt of RUB1.28 trillion ($13.5bn) as of 30 June 2023.
Eurosibenergo-Hydrogeneration LLC (a subsidiary legal entity of MKOO En+ Holding) on May 16 will create an order book for the placement of local bonds in yuan in a volume of “not less than CNY0.5 billion” for a period of 2.5 years, the yield guideline is coupon 8 .25–8.5%. Credit enhancement for the issue: offers from Eurosibenergo JSC and MKOO En+ Holding (judging by ACRA’s commentary, it is a subholding for the assets of the energy segment of MKOO En+ Group). Credit ratings: Eurosibenergo has none, MKJSC En+ Group (parent holding, not present in the issue structure) has an A-(RU) / positive rating from ACRA, MKOO En+ Holding (offeror) has a one-notch rating above the parent holding (A(RU)/stable).
The issuer has four issues of bonds in yuan in circulation (all issued at the end of 2022 - beginning of 2023, there were no bonds in circulation previously), but none are traded on the secondary market, since, apparently, all are private placements in favor of banks. This time, judging by the comments of the organizing brokers, there is an intention to partially syndicate the issue to the market (in this regard, it is not clear why the minimum application limit for the primary acquisition was set - the equivalent of ₽1.4 million in yuan).
Eurosibenergo – new placement of yuan bonds
Eurosibenergo-Hydrogeneration LLC (a subsidiary legal entity of MKOO En+ Holding) on May 16 will create an order book for the placement of local bonds in yuan in a volume of “not less than CNY0.5 billion” for a period of 2.5 years, the yield guideline is coupon 8 .25–8.5%. Credit enhancement for the issue: offers from Eurosibenergo JSC and MKOO En+ Holding (judging by ACRA’s commentary, it is a subholding for the assets of the energy segment of MKOO En+ Group). Credit ratings: Eurosibenergo has none, MKJSC En+ Group (parent holding, not present in the issue structure) has an A-(RU) / positive rating from ACRA, MKOO En+ Holding (offeror) has a one-notch rating above the parent holding (A(RU)/stable).
148 RUSSIA Country Report June 2024 www.intellinews.com