OREANDA-NEWS. October 7, 2011. Vnesheconombank has completed placing bonds of series 10 with a total nominal amount of 15 billion rubles with an offer in 5 years from the date of placement.

As a result of the placement Vnesheconombank raised 15 billion rubles, a bid book for the bonds was successfully closed on September 30, 2011.

In the course of marketing an indicative price range for the bonds was set at a level of 8.40-8.80%.

The final coupon rate was set by Vnesheconombank in the mid price range at 8.50% per annum.

The bid book was closed with a moderate over-subscription. The demand at a rate of 8.5% per annum was more than 15.7 billion rubles.

The funds received from placing the bonds will be used to fund credit-investment activity of State Corporation ‘Bank for Development and Foreign Economic Affairs (Vnesheconombank)’.

Board Member – Vnesheconombank Deputy Chairman Petr Fradkov said: “At present a volatile situation persists on the international capital market and it is associated with debt problems of the euro zone. The situation resulted in exerting serious pressure on Russian issuers’ eurobond yields. In our opinion increased yields on Vnesheconombank’s eurobonds are caused by microeconomic problems as there are no fundamental preconditions for it in terms of Vnesheconombank’s credit quality as a quasi-sovereign borrower.

Vnesheconombank pursues a balanced borrowing strategy and has a wide range of instruments to raise financing. For example, under the conditions of rates unacceptable for us on the international dollar market we refocused on other markets.

There is no doubt that in the current situation the ruble market is under pressure too: Vnesheconombank placed 15 billion rubles at a rate of 8.5% per annum for a period of 5 years, although in March of 2011, 5-year bonds were placed at a rate of 7.9% per annum.

Nevertheless, Vnesheconombank regarded the issue of ruble-denominated bonds of series 10 with linkage to ruble-dollar currency swap transaction. This issue with a swap transaction made it possible to raise dollar financing not only at much cheaper yield rates than Vnesheconombank’s current eurobond yield rates but even cheaper than the May 2011 rates when a historically minimum yield rate of Vnesheconombank’s eurobonds was recorded.

In the future, we are going to follow the current strategy and enter the market only with targeted economically efficient borrowings”.