Credit Bank of Moscow places local bonds totaling $160 mln to replace Eurobonds maturing in Jan 2025

MOSCOW. April 18 (Interfax) - Credit Bank of Moscow (MKB) has placed local bonds totaling $160.1 million as part of replacing Eurobonds maturing in January 2025, the lending institution said in a disclosure.

The share of actually placed bonds from the overall number of issued securities subject to placement was 29.6%.

The nominal volume of the outstanding Eurobond 2025 issue totaled $541 million, the coupon rate is 4.7%, and the nearest payment date is on July 29.

MKB has been remitting payments on all Eurobond issues in rubles to holders, whose rights are accounted in Russian depositories, since being included in the sanctions lists in April 2022.

MKB's supervisory board in October 2023 approved the replacement of all nine issues of the bank's Eurobonds with local bonds. The bank has currently completed replacing three of the nine, namely dollar-denominated issues maturing in 2024 and 2026, as well as a euro-denominated issue that was 34% replaced several days before maturing in February. MKB should complete replacing another euro-denominated issue at the end of April.

Replacement bonds have been appearing on the market since 2022, when Russian borrowers were legally granted the opportunity to place local bonds in order to replace outstanding Eurobonds. The main parameters of par value, maturity date, and coupon of the replacement bonds must be in line with the parameters of the exchanged issues. All payments for the replacement bonds are remitted in rubles at the exchange rate of the Central Bank of Russia (CBR) on the date of fulfilling the obligations.

According to the corresponding presidential decree, Russian companies and banks had been required to place replacement bonds by the end of 2023. However, several of them could not meet the designated deadline, and the mandatory replacement period has been extended by six months until July 1, 2024. The relative company or bank may obtain permission not to replace Eurobonds from the government's foreign investment oversight commission.