On 6 August 2015, AK BARS Bank («the Bank», «AK BARS») announced the closing of an issue of Reg S 3-year Senior Unsecured Loan Participation Notes, and became the first Russian financial institution to issue a new benchmark international hard currency bond in 2015. The bonds were issued under the Bank’s US$1,500,000,000 EMTN (Euro Medium Term Notes) Programme.
Credit Suisse Securities (Europe) Limited and UBS Limited acted as Arrangers and Dealers as well as Joint Lead Managers.
The transaction attracted a mix of international investor interest and Russian demand. Following roadshow exercise in Asia and Europe, AK BARS received orders from over 40 investors represented primarily by banks and investment funds from Europe, Russia, Middle East and Asia. The reception of the transaction by the market allowed AK BARS to upsize the deal from an initial amount of US$300mn to US$350mn. The order book was approx. 1.5x oversubscribed. The bond was priced at par and the final yield / coupon on the issue was set at 8.000%.
The issue performed well in the immediate aftermarket, being quoted above par despite volatility in currencies and commodities.
The bonds are listed on Irish Stock Exchange and rated B1 by Moody’s and BB- by Fitch.
Commenting on the bond issuance, Robert Minnegaliev, the Bank’s Chairman of the Management Board, said: «I am delighted to see that AK BARS Bank has managed to successfully complete the issuance of the bonds despite volatile market conditions and the protracted geopolitical concerns across the globe. I believe this underpins the strong position of the Bank and illustrates some degree of investor interest for certain Russian issuers. It is of utmost importance to see that international investors are ready again to look at Russian credits with appropriate risk metrics. I would like to thank my colleagues and our advisors, and congratulate them upon the successful completion of the deal».