RUSNANO Issues RUB 12 Bln of Bonds at 7.7%, Its Lowest Ever Coupon Rate

16 October 2019

On October 15, RUSNANO closed the bidding register for its issue of 3-year traded bonds, series BO-002R-03. The issue was underwritten by Alfa Bank, Raiffeisen Bank, Rosbank and Rosselkhozbank.

The issue was initially priced at RUB 5 bln, with a provisional coupon rate of between 8.40 and 8.65% per annum. During the application process more than 90 bids were recorded in the bidding register, from all categories of investors: banks, investment, management and insurance companies, and private individuals. According to the register, the issue was oversubscribed by 5 times.

This allowed the company to increase the size of the issue substantially, up to RUB 12 bln, and also close the register with an annual coupon rate of 7.7%, much lower than the originally proposed rate, which will give an effective rate of 7.85% upon maturity.

Artur Galstyan, RUSNANO Managing Company’s Chief Financial Officer: “After we started trading on the market without state support, in April 2019, we were able to increase our circle of market investors for our new bond issue. This enabled us both to increase the size of the issue and to substantially reduce the final coupon rate. We have seen an unprecedented level of demand for RUSNANO securities. The provisional coupon rate was reduced four times, and the final rate was an improvement of 95 base points. In view of the good size of the issue, the diversity of the subscribers and the high quality of the bids, we are confident that this issue will be very successful in trading on the secondary market. RUSNANO’s financial stability and its chosen strategy have won the approval of the market.”

Anna Bakulina, Head of Alfa Bank’s Division for work with financial companies: “This is the first time Alfa Bank has underwritten a bond issue by RUSNANO. We are very happy with the results of our first issue: it is very rare that we see so many applicants for an issue on the Russian bond market. The final coupon rate was fixed at 7.7% per annum, a record low for the company.”

Oleg Kornilov, Executive Director for Debt Capital Markets, Raiffeisen Bank: “The amount of demand and the highly diverse range of investors result in a highly liquid secondary bond market. Moreover, the high level of interest in the issue shows that investors put a high value on both the issuer’s development strategy, and its importance for the country’s development, and this will enable RUSNANO to raise funds on the financial markets in the future, with the same success.”

Additional information

Reference

RUSNANO Joint-Stock Company was founded in March 2011 through reorganization of state corporation Russian Corporation of Nanotechnologies. JSC RUSNANO contributes to implementation of the state policy on the development of the nanotechnology industry by investing directly and through investment funds of nanotechnology in financially effective high-technology projects providing the development of new production facilities in the Russian Federation. Its primary investment focus is in electronics, optoelectronics and telecommunications, healthcare and biotechnology, metallurgy and metalwork, energy, mechanical engineering and instrument making, construction and industrial materials, chemicals and petrochemicals. 100 percent of RUSNANO’s shares are state owned. Thanks to RUSNANO’s investments, there are currently 105 factories and R&D Centers opened in 37 regions in Russia. JSC RUSNANO has profit for the last 5 years.

Management of assets of RUSNANO JSC is carried out by Limited Liability Company established in December 2013, RUSNANO Management Company. Anatoly Chubais is the Chairman of its Executive Board.

Work to establish nanotechnology infrastructure and carry out educational programs is fulfilled by RUSNANO’s Fund for Infrastructure and Educational Programs, which was also established during the reorganization of the Russian Corporation of Nanotechnologies.