The Alfa Banking Group has successfully closed a USD250mln subordinated Eurobond issue

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Today Alfa Banking Group successfully placed a Basel 3 compliant 10.25NC5.25 subordinated eurobond issue in the amount of USD250 mln with an interest rate of 9.5% per annum, at the bottom level of the initial guidance. The Loan Participation Notes were issued by an Irish SPV Alfa Bond Issuance plc under RegS and Rule 144A.

The deal has become the longest among Russian issuers since summer 2014. It is also the first subordinated deal on the market since summer 2014.

The issue will be fully included into Alfa-Bank’s Tier 2 capital. The proceeds will fuel further organic growth of the Bank.

Alexei Tchoukhlov, Chief Financial Officer and Deputy Chairman of the Management Board, has commented: «We are satisfied by investors’ demand and consider that this issue was placed successfully given challenging market environment. Despite macroeconomic concerns, Alfa-Bank received support from investors due to its high credit quality, professional risk management, clear and consistent strategy, transparent shareholder structure and the role that the Bank plays on the Russian banking market. As the Bank’s management constantly emphasizes, we distinguish opportunities where others may notice only problems. We have become the first issuer on the subordinated eurobond market among Russian borrowers since summer 2014. We consider that the deal can become a benchmark for investors and issuers and provides evidence that restricted access to the capital markets for a number of Russian companies does not mean its unavailability for all Russian issuers».

Joint Lead-Managers and Bookrunners of the issue are Alfa-Bank, Goldman Sachs International, JP Morgan Securities Plc, Merrill Lynch International, UBS AG.