Alfa-Bank has successfully closed the book of subordinated Tier 2 Eurobonds compliant with Basel III (Central Bank Regulation 646-P). The total amount of the subordinated loan is USD 350 mln, the call option is scheduled in 5.5 years, the maturity is in 10.5 years.
The coupon rate for the first 5.5 years was fixed at 5.5% per annum payable semi-annually. This is the lowest rate on subordinated dollar-denominated loans among the Russian banks issues since 2014.
“Around 50 institutional investors from the USA, Europe, Great Britain, Switzerland, Asia and Russia took part in the deal. Investors were focused primarily on Alfa-Bank, and not on a controversial external information background, that could be an obstacle for the placement of other issuers. Alfa-Bank demonstrated strong financial results in 2020. As a result Fitch Ratings upgraded Alfa-Bank to investment grade in April and S&P revised the outlook on our ratings to Positive last week.
The placement was very successful, what once again proved Alfa-Bank’s high quality as an issuer. During the book building the rate dropped from 5.875% area IPTs to 5.5% final yield. The demand exceeded the originally announced deal size by almost 1.5 times.
The placement amount is in line with Alfa-Bank’s medium-term growth plans. Additional Tier 2 capital will enhance our development that includes strengthening our positions in both the retail and corporate markets.” – commented Alexei Tchoukhlov, Deputy Chairman of the Executive Board, Chief Financial Officer.
After the CBR’s approval the amount of the issue will be included into Tier 2 Capital of Alfa-Bank. The Notes are issued by Alfa Bond Issuance plc. The issue was arranged under the Bank LPN Programme in 144A/RegS format. The Lead Managers are Alfa-Bank and J.P. Morgan.