Demand for 7-yr RZD Eurobonds tops $1.5 bln - source
MOSCOW. Feb 22 (Interfax) - Demand for seven-year Russian Railways (RZD) Eurobonds that the company plans to place on Wednesday exceeds $1.5 billion, a source in banking circles told Interfax.
The bid book has been opened with a yield guidance of about 4.625%. JP Morgan and VTB Capital are the placement organizers. The road show for the issue was held in London on February 20-21.
RZD may follow up the dollar-denominated Eurobond placement with a placement of Eurobonds denominated in rubles. That bond issue is being organized by Gazprombank , JP Morgan and VTB Capital.
RZD made use of a similar combination in September 2016, first placing $500 million in four-year Eurobonds at 3.45% annually and immediately after placing 15 billion rubles in seven-year Eurobonds at 9.2%. Demand for the dollar bonds exceeded the offering eight-fold, making it possible to set the rate at a record low level for RZD.
The proceeds from last year's dollar-bond placement were used to redeem a portion of Eurobonds maturing in 2017. RZD must refinance or redeem the remaining $919 million of the issue in April.
RZD's debt portfolio, including bank loans, ruble obligations and Eurobonds, totaled 905.3 billion rubles as of December 31, 2016, 7% less than a year earlier. Debt denominated in foreign currencies accounted for 38.1% of the total. RZD plans to hold that figure to roughly 40%.
