OREANDA-NEWS. March 27, 2008. Alfa-Bank has arranged the first-ever placement of a new financial instrument on the Russian stock market: exchange-traded bonds. The bonds — for RBC Information Systems — were successfully placed on March 25, 2008 on the MICEX Stock Exchange.

Investors’ demand for the securities substantially exceeded the declared volume of the issue. Some 86 proposals were received, with a total of 2,373 bln rubles in bonds placed through open subscription, or 159% of the volume of the issue. The coupon rate is fixed at 12.25% per annum.

Exchange-traded bonds have no equivalent on the Russian stock market in terms of convenience and cost of issue. State registration is not required in order to issue them, which considerably shortens their placement time and allows an issuer to more quickly raise money.

The launch of the new instrument was made possible by legislation on the securities market recently introduced by the Federal Financial Market Service. The new rules are a testament to the maturity of Russia’s stock-exchange infrastructure and the government’s high level of confidence in the country’s financial system. The debut of exchange-traded bonds represents the first time the stock exchange has had the right to independently register the issue of new instruments.

"Commercial paper comprises the world’s largest capital market. Exchange-traded bonds should become the analogue of commercial paper in Russia. This instrument will now be available to Russian companies whose shares are traded on Russian stock exchanges. The bonds will be included in their listing. We believe that exchange-traded bonds enjoy certain advantages that could make them an optimal instrument of liquidity control and credit-portfolio diversification for Russian companies," noted Edward Kaufman, Alfa’s Head of Investment Banking.