The Alfa Banking Group Successfully Closes USD500mln 3-year Eurobond

On 18 November 2015 the Alfa Banking Group successfully closed a USD500mln 3-year Eurobond. The coupon rate was fixed at 5% per annum after repeated revision of price ranges due to strong interest from a wide range of international investors that exceeded 2.8 billion US dollars. The Notes are issued by Alfa Bond Issuance plc. The issue was realized within its own LPN Program under RegS.

During 2015 this deal became the first public offering of Eurobonds with benchmark size in the primary market among Russian financial institutions after the international financial community revised the attitude to the Russian country risk due to the events in 2014. As a result of cooperation with a broad base of investors and after sequential revision of the indicative range of interest rate Alfa-Bank decreased the final interest rate from the initial rate of about 5.625% to acceptable rate of 5%, reflecting the balance of the Bank’s interests in terms of coupon rate, amount and maturity. The final order book consists of more than 180 orders and is presented by a wide range of investors from around the world: from England, Germany, France, Switzerland, the island of Taiwan, South Korea, and other countries.

Alexey Tchoukhlov, First Deputy Chairman and Chief Financial Officer, said:

«We are satisfied with investors’ demand, and we believe that the issue was successful and well timed. According to our Lead Managers we have the lowest ever coupon rate among Russian private banks. This deal once again confirms that the Bank has access to international capital markets at competitive rates of return, and it continues to enjoy stable investors’ support. This is primarily achieved due to the high credit quality of the Bank, competent risk management, coherent strategy and clear ownership structure, as well as the role that the Bank plays in the Russian banking market».

The Lead Managers are Barclays Bank PLC, UBS Limited and Alfa-Bank.