Page 150 - RusRPTJun24

the dollar – Phosagro BO-P01-USD. The parameters are very similar to the initial announcement of the dollar issue of Novatek (the book is already closed) and Polyus (pre-marketing opened yesterday) volume “from $200 million”, tenor 5 years, cuts at $100, coupon guideline “not higher than 6.5%”. As in the case of Polyus, there are no reports of corporate actions regarding new placements on information disclosure sites - there are no decisions of the board of directors, no announcements about the start of placements, or issue documentation. It is possible that all announced placements are a consequence of “reverse requests” for the purchase of securities with currency pegs from some local investment pool.
The addition of new corporate issues of good credit quality to the pool of issuers of foreign currency local bonds undoubtedly adds depth to the market and, apparently, will completely replace the redemptions of replacement bonds (SR) in 2024 (about $1 billion completed, $1.1 billion to come). On the other hand, the announced price targets slightly exceed the observed secondary price levels (for example, Phosagro-28 is quoted at a yield of about 6%; in April-May the issue lost about 3 percentage points in price) and, accordingly, a certain overhang of new placements has arisen may affect secondary market prices.
On May 22, Novatek-1Р2 bond issue pegged to the dollar (RU000A108G70) began trading. The size of the placement was greatly increased compared to the benchmark ($750 million versus $200 million), so the order book in the issue looks quite heavy, and the quotes dropped below par. In terms of relative value, the issue nevertheless looks interesting in comparison with Phosagro-ZO28 (before the announcement of the placement of Novatek’s issue, the yield of the latter was 5.4%, now 6%), but the correction in the issue may continue against the backdrop of pre-marketing of the new 5- summer dollar issue of the same issuer (see above).
150 RUSSIA Country Report June 2024 www.intellinews.com