PhosAgro places local bonds totaling $357 mln to replace over 70% of 2025 Eurobonds

MOSCOW. July 20 (Interfax) - PhosAgro has placed local bonds totaling $356.9 million in order to replace the dollar-denominated 2025 Eurobonds, the fertilizer producer said in a disclosure.

The share of actually placed bonds from the total number of securities of the additional issue totaled 71.4%.

The issue's coupon rate is 3.05%, and there were initially $500 million in outstanding Eurobonds.

The law that permits Russian companies to issue "substitute" bonds allows for their payment in Eurobonds, as well as in cash, provided that the intended use of the funds is to acquire Eurobonds.

Redemption of the replacement bonds and the payment of income on them are rendered in rubles at the exchange rate of the Central Bank of Russia on the date of fulfilling the obligations.

PhosAgro began replacing its dollar-denominated 2028 Eurobonds at the same time as the 2025 Eurobonds, and the results of the replacement should be disclosed next week.

Substitute bonds have appeared on the market since last year, when Russian borrowers were legally allowed to place local bonds in order to exchange outstanding Eurobonds for them. The main parameters of the replacement bonds must match the parameters of the exchanged issues.

Until recently, the placement of these bonds was one of the options for borrowers. However, President Vladimir Putin at the end of May signed a decree on the mandatory placement of "substitute" bonds by Russian borrowers by January 1, 2024. PhosAgro was the first to join the companies that had already started placing "substitute" bonds following the May decree.