By Andrei Skvarsky.
Russia’s Sovcombank debuted in the global debt market this month with its first-ever Eurobond issue, 85 per cent of which was sold to European, US and Asian banks and investment firms with total demand that exceeded the bonds’ combined face value by more than one-third.
Citi, J.P. Morgan, UBS, Sberbank, VTB, Gazprombank, and Renaissance Capital arranged what was a 10.5-year $300m subordinated Eurobond with a coupon of 8 per cent and a call option exercisable after 5.5 years, Sovcombank said in a statement.
Subordinated debt is an arrangement where the lender is to be compensated after all other creditors have been if the borrower defaults. It is typically an unsecured loan or bond.
Demand for Sovcombank’s Eurobond, rated by Fitch at BB, exceeded $450m, according to the statement.
Russian investors bought 15 per cent of the issue.
As regards the rest, 41 per cent was acquired by British, 20 per cent by other European, 13 per cent by American, and 10 per cent by Chinese, including Hong Kong, and Singaporean investors.
Euronext Dublin, an Irish stock exchange forming part of pan-European bourse Euronext, was the trading floor for the Eurobond.
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