VTB expects to replace two Eurobond issues in Q1, partly convert perpetual issue to rubles

MOSCOW. Feb 20 (Interfax) - VTB expects to replace two Eurobond issues denominated in Swiss francs and U.S. dollars before the end of the first quarter of 2024, and hopes to at least partly convert its issue of dollar-denominated perpetual subordinated bonds into rubles, the Russian state bank's first deputy CEO, Dmitry Pyanov told reporters.

VTB's supervisory board approved the replacement of three Eurobond issues with local bonds in December.

The bank's largest outstanding Eurobond issue consists of $2.25 billion in perpetual subordinated bonds placed in 2012. VTB also has subordinated Eurobonds totaling CHF350 million that mature in 2024 and dollar-denominated Eurobonds that mature in 2035. The latter issue initially totaled $1 billion, but was reduced considerably as a result of a put option and buyback. The Central Bank of Russia registered all three issues of replacement bonds in early February.

"For two of these three we plan to do the placement fairly quickly and, if everything works out, replace the Swiss francs, which is a T2 term subordinated issue, and the senior VTB-35 issue, before the end of the first quarter," Pyanov said.

As for the perpetual bonds, the next coupon payment on which is due on June 6, VTB plans to "complete discussions with holders and with the Central Bank" before summer, before the date of this coupon payment, he said. VTB suspended payments on these bonds as of December 6, 2022.

"Taking into account new regulation of open forex positions that goes into effect in 2024, we want to offer holders a substitution of this issue in rubles. Thus, carry out our strategy of 'rublifying,' at least partially, the largest subordinated issue we have in our portfolio," Pyanov said.