2 Nov 2009 19:35

RZD board approves 200 bln rubles in bonds

MOSCOW. Nov 2 (Interfax) - Directors at Russian Railways (RZD) have approved plans to issue 200 billion rubles in bonds, the company said in a statement.

The company will register eight issues of exchange bonds totaling 100 billion rubles and maturing in three years with the MICEX Stock Exchange in November; and seven issues of unsecured bonds totaling 100 billion rubles and maturing in 10-15 years with the Federal Financial Markets Service (FFMS) in December-January.

RZD said it would offer a 20th series of 20 billion rubles, 21st and 22nd series of 10 billion rubles each, 23rd-to-26th series of 15 billion rubles each in conventional bonds; and exchange bonds Bo-01-04 for 15 billion rubles each and Bo-05-08 for 10 billion rubles each.

RZD has never tried to raise capital with exchange bonds, which do not take as long to register and place as conventional bonds, and do not have to be placed within a set timeframe. "We plan to place 30 billion-40 billion rubles in exchange bonds in Q4 2009," said Vadim Mikhailov, an RZD senior vice president.

However RZD will continue to raise long-term funding with conventional bonds to enhance its loan portfolio, Mikhailov said.

Short-term debt and debt in forex should represent less than 20% of the loan book by the end of 2010, and the company does not plan to increase overall debt significantly.

RZD has 15 bond issues worth 199 billion rubles and maturing in 3-5 years outstanding.