By Susanna Moon
Chicago, Nov. 3 – Sistema JSFC placed RUB 6.5 billon of 10-year series 001Р-04 exchange-traded bonds with an initial coupon of 9.8%.
The bid book closed Wednesday, with the coupon targeted in the range of 9¾% to 10%, according to a company announcement.
The issue calls for a tender offer after four years, which provides holders with the right to turn in the bonds for repurchase, the release noted.
The length of the coupon period is 182 days.
Initial guidance on the coupon ranged from 9¾% to 10% per year, implying a yield at the time of the tender offer of 9.99% to 10¼%, the company said.
Over the course of bookbuilding the initial price range was lowered twice, ultimately to 9¾% to 9.85% for a yield of 9.99% to 10.09%.
Demand for the issue topped RUB 8 billion, which allowed Sistema to upsize the issue from a planned RUB 5 billion and set the first eight coupons at 9.8% for a tender offer yield of 10.04%, the company noted.
“The main objective of this placement is to further optimize the company's debt by replacing FX debt and more expensive ruble debt, as well as lengthening repayment terms,” Sistema senior vice president and finance director Vsevolod Rozanov said in the press release.
“The placement was a success thanks to reduction of interest rates on the market as well as investors' recognition of our successful efforts to reduce Sistema's debt this year, which resulted in oversubscription of the order book and an attractive interest rate.”
The organizers of the debt issue are VTB Capital and Sovkombank.
Sistema is a Russian conglomerate based in Moscow.
| Issuer: | Sistema JSFC
|
| Issue: | Series 001Р-04 exchange-traded bonds
|
| Amount: | RUB 6.5 billion
|
| Maturity: | 10 years
|
| Lead managers: | VTB Capital and Sovkombank
|
| Co-managers: | MTS Bank, East West United Bank SA and Rosselkhozbank
|
| Agent: | VTB Capital
|
| Coupon: | 9.8% for the first eight coupons
|
| Yield: | 10.04%
|
| Pricing date: | Nov. 2
|
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