Banks bought 24% of Russian Eurobonds, funds - 60%, insurers -16%, MinFin says
MOSCOW. June 23 (Interfax) - Banks bought 24% of the $3 billion in 10- and 30-year sovereign Eurobonds that Russia placed this week, the Finance Ministry said in a statement.
The buyers included banks specializing in private banking.
The ministry said funds and management companies bought 60% of the bonds and insurance companies bought 16%.
The Finance Ministry placed $1 billion in a 10-year tranche of sovereign Russian USD notes at 4.25% per annum and $2 billion in a 30-year tranche at 5.25% pa on Tuesday. Initial yield guidance was 4%-4.5% for the 10-year notes and 5%-5.5% for the 30-year notes, and was later rounded to c. 4.25% and c.5.25%.
These, like the sovereign bonds placed last year, were sold in keeping with English law and listed on the Irish Stock Exchange under rules "144A"/"RegS", for American and European investors, respectively. The sole organizer was VTB Capital, with settlements for the bonds conducted via the National Settlement Depository and Euroclear.
Bids worth just over $6.6 billion from more than 200 investors were received for the bonds.
The ministry said more than 85% of the two bond tranches combined was bought by investors from the United States, Britain, continental Europe and Asia, including U.S. investors - 32%, British - 31%, Europe - 10% and Asia - 14%. The bid book contained new names among major institutional investors from the United States and Britain who did not participate in the 2016 bond offering.
Russian investors - banks, management companies, brokerages - bought less than 15% of the overall offering. Nonresidents bought 94% of the 30-year tranche of bonds.
Andrey Solovyev, Global Head of Debt Capital Markets at VTB Capital, the placement's sole organizer, told Interfax that 34% of the investors who bought the 10-year bonds were from Britain, 30% were Russian, 22% - American, 6% from each of Asia and the EU, and 2% from Switzerland.
He said 36% of those who bought the 30-year tranche were American, 30% - British, 18% - Asian, 9% - EU, 1% - Swiss and the rest Russian.
The Finance Ministry said spreads between the new bonds and US Treasuries narrowed compared with the 2016 placement, from 227 to 209 basis points for the 10-year tranche and from 272 to 250.8 bps for the 20-year tranche.
Yield on this year's 10-year tranche was set at 4.25%, below that on last year's; and yield for the 30-year bonds was 5.25%, or lower than for the 30-year notes placed in 2013.
