Page 119 - RusRPTApr24

Upon entering the market, VTB's replacement bond issuance is poised to become one of the most significant perpetual local currency corporate bond offerings, marking a pivotal move in the bank's strategy to navigate through the complexities of international sanctions and settlement disruptions.
The Board of Directors of Alfa-Bank approved the issue of 30% Eurobonds at 5.9% The Board of Directors of Alfa-Bank decided to place replacement bonds (SO) on the “new” line XS2410104736 (5.9% coupon). There are no planned placement dates yet. The placement will be on the exchange (for securities held by NSD) and over-the-counter (for securities in depositories under NSD). In an over-the-counter placement, it will be possible to exchange only securities accounted for in Russian depositories, i.e. the exchange will probably be carried out not by assignment of rights, but by intra-depository transfers. The bank's Eurobonds will not be settled in the external perimeter from mid-2022. The bank has previously exchanged two issues of ruble Eurobonds for the EO – 25₽ 6.75% and 25₽ 7.85% (there is no secondary liquidity in both EOs). It is not clear why the decision was made only on one of the remaining unexchanged issues of foreign currency Eurobonds (Alfa-31T2 still remained [Cbonds for some reason calls the issue perp, although it has a maturity date and does not reset the coupons], Alfa-30T2, Alfa perp 6 .95%).
Russian Railways (RZD) announced on Friday, March 22, the commencement of a replacement bond (ЗО) program aimed at exchanging its existing Eurobonds issued by RZD Capital plc. While specific exchange timelines were not provided, the notification suggests that the exchange for RZD-26₽ and RZD-26CHF issues (ISIN XS1843431690 and CH0522690715) is set to begin this week. These replacement bond issuances were registered by the Central Bank of Russia a week prior.
The 2024 maturity bonds will not be subject to exchange due to an exemption from the commission's regulation. The preparation process for replacement bonds for issues XS1843442465, XS2271376498, CH0419041634, and XS2318748956 (RZD-25 ₽, -28₽, -28CHF, and -28₽) is currently awaiting Central Bank registration, with the exchange anticipated between April and June 2024. The "order of obligation fulfillment" for other issues (CH0419041618, XS1843437036, XS0609017917, and CH110025981, i.e., RZD-25CHF, -27€, -31GBP, and -CHF perpetual) is under regulatory review, suggesting that the replacement bond placements for the majority of RZD's currency issues are more likely to occur in May or June.
The announcement does not clarify whether the Eurobonds can be exchanged, including through the transfer of claim rights. RZD's Eurobonds are settled through Euroclear, but external payments have been obstructed. This move is part of Russian Railways' broader strategy to navigate financial market complexities amid ongoing international restrictions.
119 RUSSIA Country Report April 2024 www.intellinews.com