Gazprom on Dec 6 to begin placing local bonds to replace dollar-denominated Eurobonds maturing in 2029
MOSCOW. Dec 5 (Interfax) - Gazprom Capital plans to place new local bonds in order to replace dollar-denominated Eurobonds maturing in 2029, the company said in a disclosure.
According to the disclosure, the issuer could place up to two million bonds at par value of $1,000 each. Gazprom currently has in circulation Eurobonds maturing in January 2029 totaling $2 billion, with a coupon rate of 2.95%, and the next coupon payment on the debt securities on January 27.
The starting date for the placement is December 6, and the planned ending date is December 21, or the date of placing the final bond.
A placement normally includes over-the-counter and exchange tranches. The over-the-counter tranche will be placed by open subscription by rendering credit entries on personal accounts, deposit accounts, of the first holders and nominal holders of Eurobonds. The exchange tranche will be placed through the conclusion of transactions for the purchase and sale of bonds on the Moscow Exchange . Bookbuilding for both tranches will take place from 10:00 a.m. Moscow time on December 6 to 6:00 p.m. on December 16.
The "substitute" bonds must have the same terms and conditions as the Eurobonds being exchanged in terms of the amount and timeframes for payment of the coupon yield, maturity, and the nominal value. Meantime, settlements on the securities will be remitted in rubles at the exchange rate of the Central Bank of Russia (CBR) on the date of the respective payments.
Gazprom has been successively replacing Eurobonds, whose rights are accounted in the Russian infrastructure, with local debt securities since September. As part of the transactions, the company has partially replaced two dollar-denominated Eurobonds, pound-sterling-denominated Eurobonds, and three issues of euro-denominated Eurobonds with local bonds.
The company is currently bookbuilding to replace two more dollar-denominated issues maturing in 2027 and 2031. Additionally, Gazprom this week is to sum up the results of the placement of local bonds to replace the issue of euro-denominated Eurobonds maturing in January 2024.
Exchanging Eurobonds for local Russian bonds is the only way for investors to receive coupon and par value payments for their bonds held in Russian depositories, Famil Sadygov, Gazprom CFO and deputy chairman of the executive board, said previously. Investors who have not submitted replacement requests on time will still be required to receive payments through foreign clearing systems, which have not permitted payments to Russian investors since March of this year, Sadygov explained.