Belarus-based food retailer Eurotorg has announced the successful pricing of its debut RUB-denominated bond offering.
The retailer placed RUB 5 billion (€70 million) of five-year unsecured bonds with a coupon of 10.95%.
Commenting on the transaction, Denis Shulakov, senior vice-president at Gazprombank, said, "Demand was more than twice the offer size, at around RUB 13 billion (€180 million), and investors placed more than 500 orders.
"The offering attracted demand from a range of investors including banks, management, and investment companies, Western funds and retail investors," Shulakov continued. "This illustrates the high levels of interest in the Russian market and appetite for RUB-denominated issuance – including from international issuers – among not just Russian but also international investors."
The bonds were issued by a special purpose vehicle, LLC Retail Bel Finance, which is incorporated in Russia.
'Long-Term Presence'
Eurotorg chief executive, Andrey Zubkou, described the transaction as "the first step" in establishing the company's long-term presence in the Russian capital markets.
He said, "Adding RUB-denominated debt gives us an additional source of long-term unsecured financing. As a result of this issuance, we will have a more flexible repayment schedule and an increased average maturity of our debt portfolio."
In May of this year, Eurotorg became the first non-Russian corporate entity to be assigned a credit rating by a Russian credit ratings agency.
Russian ratings agency Expert RA(RAEX) assigned the company’s expected RUB-denominated bond a rating of RuA– on its Russian ratings scale.
'Strong Credit Rating'
The CEO of the Moscow Exchange, Yury Denisov, said, "We are pleased to welcome an issuer with a strong credit rating to the Moscow Exchange.
"Eurotorg's business model and the retail sector more broadly are well known and understood by Russian and international investors, and this helped drive strong demand for the bond issue of this Belarusian retailer," he explained.
BCS Global Markets, Gazprombank, Credit Bank of Moscow, Region Group of Companies and Renaissance Capital acted as arrangers.
LECAP acted as transaction legal counsel and LCPIS has been appointed note trustee in accordance with Russian law, the company said.
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Dayeeta Das. Click subscribe to sign up to ESM: The European Supermarket Magazine.
