Gazprom may place Eurobonds in euro; 10-yr term possible if demand warrants
MOSCOW. July 20 (Interfax) - Gazprom may place Eurobonds denominated in euro with maturities of three-five years, and possibly seven-ten years if investor demand warrants, a source in financial circles who participated in meetings with the gas giant during its European road show told Interfax on Monday.
"Gazprom is hoping to place a benchmark issue, that is, at least 500 million euro, but if the demand exists, it might place more than 1 billion euro, about 1.5 billion euro," the source said.
Gazprom has not said what yield it is reckoning on, he said. An issue of Gazprom Eurobonds maturing in 2014 - currently yielding 7.65% annually - ought to be taken as a benchmark, the source said. The yield of the new bonds might amount to 8%-8.15% annually, he said.
It was reported earlier that Gazprom gave BNP Paribas and Societe Generale the mandate to meet with Eurobond investors in Europe and JP Morgan and Morgan Stanley - in the U.S.
The road show began on Monday.
Gazprom plans to place a tranche of dollar-denominated Eurobonds totaling $1.5 billion, and another tranche totaling about 350 million euro. JP Morgan and Morgan Stanley are organizing the dollar issue and Societe Generale and BNP Paribas are organizing the euro issue.
It was reported earlier that Gazprom will use part of the proceeds to help its subsidiary, Gazprom Neft , purchase shares in UK-based oil company Sibir Energy and part to implement its own capital expenditure plan.
RTS$#&: GAZP, SIBN