USD 500 mln, the first call option is scheduled in 5.25 years; the initial coupon rate for the first 5.25 years was fixed at 6.95% per annum (quarterly payment).
Alexei Tchoukhlov, Acting Chief Executive Officer, Deputy Chairman and Chief Financial Officer, said:
«We monitor the dynamics of the capital markets all the times very carefully and try to raise funds in the most favourable moments in terms of price. We have an infrastructure that allows us to react quickly to «window opportunity», similar to the one that was observed throughout January. We decided to take advantage of the favorable market conditions to place the instrument increasing the Bank’s Additional Tier 1 capital, and not only to increase long-term liquidity. This is extremely important for our growth strategy, which is based on strengthening our position of the largest privately owned bank for corporate clients and expanding our presence in the retail lending market. The issued amount fully corresponds to our medium-term plans for the Bank’s development, providing an additional capital cushion.»
In the beginning of the week we met with investors in London, Zurich and Geneva, and clearly understood that now the conditions for the issuance are optimal.
This deal once again confirms that the Bank has access to international capital markets at competitive rates even when issuing Additional Tier 1 instruments. The fact that the coupon rate was fixed more than 1% below the rate at which we attracted a similar subordinated loan in November-December 2016 indicates that our work in the past year, the role that the Bank plays in the Russian banking market, is positively assessed by investors.
The coupon rate of 6.95% is at record low level for all Russian banks, both private and public ones, to attract Additional Tier 1 capital in the Eurobond format. The transaction involved more than 75 institutional investors and large funds from Europe, Great Britain, Switzerland and Asia, Russian investors showed considerable interest.”
Demand exceeded the originally announced deal size by almost 2.6 times, that allowed us to fix the final rate by 0.3% lower than the originally announced price range.
After the CBR’s approval of the loan agreement the amount of the issue will be included in Additional Tier 1 Capital of Alfa-Bank. The Notes are issued by Alfa Bond Issuance plc. The issue was arranged under the Bank LPN Programme in RegS format. The Lead Managers are Alfa-Bank and UBS Limited.
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The information contained herein does not constitute or form part of any offer or invitation to purchase, otherwise acquire, subscribe for, sell, otherwise dispose of or issue, or any solicitation of any offer to sell, otherwise dispose, issue, purchase, otherwise acquire or subscribe for any security in any jurisdiction, nor should any part of it nor the fact of its distribution form part of or be relied on in connection with any contract or investment decision relating thereto, nor does it constitute a recommendation regarding the securities of Alfa Bond Issuance plc.
The information contained herein is not an offer, or an invitation to make offers, to sell, exchange or otherwise transfer securities in the Russian Federation or for the benefit of any Russian person or entity and does not constitute an advertisement or offering of securities in the Russian Federation. The information contained in this announcement is intended only for «qualified investors» within Russian legislation or to persons outside Russia. This announcement must not be distributed or circulated into the Russian Federation or made available in the Russian Federation, unless and to the extent permitted under Russian law.
The information contained herein is not for public release, publication or distribution, directly or indirectly, in or into the United States of America. The materials do not constitute an offer of, or solicitation to purchase or subscribe for, securities in the United States, nor may the securities be offered or sold in the United States, or to, or for the account or benefit of, U.S. persons (as such term is defined within Regulation S under the Securities Act of 1933 (the «Securities Act»)), absent registration or an exemption from the registration requirements of the Securities Act. No public offering of securities will be made in the United States of America. Copies of this announcement are not being made and may not be distributed or sent into the United States, Russia, Canada, Australia or Japan.
This announcement is directed only at persons who (i) are outside the United Kingdom or (ii) have professional experience in matters relating to investments falling within article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the «Order») or (iii) are persons falling within Article 49(2)(a) to (d) («high net worth companies, unincorporated associations, etc.») of the Order or (iv) to whom this announcement may otherwise be directed without contravention of section 21 of the Financial Services and Markets Act 2000 (all such persons together being referred to as «Relevant Persons»). This announcement must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this announcement relates is available only to Relevant Persons and will be engaged in only with Relevant Persons.
This announcement is not directed at retail clients (as defined in the Product Intervention (Contingent Convertible Instruments and Mutual Society Shares) Instrument 2015) in the European Economic Area («EEA»). The notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the EEA. For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, «MiFID II»); or (ii) a customer within the meaning of Directive 2002/92/EC («IMD»), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified investor as defined in Directive 2003/71/EC, as amended (the «Prospectus Directive»). Consequently no key information document required by Regulation (EU) No 1286/2014 (the «PRIIPs Regulation») for offering or selling the notes or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the Notes or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPs Regulation.
Solely for the purposes of each manufacturer’s product approval process, the target market assessment in respect of the notes has led to the conclusion that: (i) the target market for the notes is eligible counterparties and professional clients only, each as defined in MiFID II; and (ii) all channels for distribution of the notes to eligible counterparties and professional clients are appropriate. Any person subsequently offering, selling or recommending the notes (a «distributor») should take into consideration the manufacturers’ target market assessment; however, a distributor subject to MiFID II is responsible for undertaking its own target market assessment in respect of the notes (by either adopting or refining the manufacturers’ target market assessment) and determining appropriate distribution channels.
Some of the information in this press release may contain forward-looking statements regarding future events or the future financial performance of the Alfa Banking Group. You can identify forward-looking statements by terms such as «expect,» «believe,» «anticipate,» «estimate,» «intend,» «will,» «could,» «may» or «might,» or the negative of such terms or other similar expressions. These statements are only predictions and actual events or results may differ materially. The Alfa Banking Group does not intend to or undertake any obligation to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in forward-looking statements.