On December 20, AO «Alfa-Bank» successfully closed the additional issue of USD 300 mln perpetual Eurobonds compliant with Basel III (Central Bank Regulations 395-P). The issue parameters correspond to the principal terms of the first public offering of Eurobonds by a Russian financial institution compliant with Basel III, which Alfa-Bank accomplished on November 3, 2016: the first call option is scheduled for February 3, 2022, with the initial coupon rate fixed at 8% per annum (quarterly payable). The total amount of the subordinated loan will stand at USD 700 mln (following approval by the Central Bank).
Alexei Tchoukhlov, Deputy Chairman and Chief Financial Officer, said:
«Alfa-Bank has been complying with the Central Bank’s capital adequacy requirements by a large margin. Given the successful closure of the perpetual subordinated issue in early November and the steadily growing quotations on the secondary market, we also believed that investors will demonstrate a substantial interest in the additional issue despite the beginning of the winter holiday season. The timeframe of a possible additional issue is rather strictly regulated, so it was important to close it before the end of 2016. We are happy with the offering outcome both in terms of value (the offering price reached 101% of the nominal value, which yields 7.762% per annum) and investors: a great deal of institutional investors from Europe, the UK, Switzerland, Asia and Russia joined the deal. The demand exceeded the supply by practically 1.5-fold. The fact that we closed this kind of deal in the season atypical of capital markets (late December) amid the absence of positive international news proves that investors keep a wary eye on Alfa-Bank’s activity and are ready to rapidly respond to offers of the quality issuer.»
The additional issue will be included in Alfa-Bank’s sources of additional capital following the Central Bank’s approval of the loan deal. The bonds were issued by Alfa Bond Issuance plc. Ireland). The issue was realized within its own LPN Program under RegS. It was organized by Alfa-Bank and UBS Limited.