Lebedyansky JSC, the largest natural juice producer in Eastern Europeand one of Russian baby-food market leaders, placed a debut bond issueof 1.5 billion RUB (approx. 43.7 million euros). This is the first everbond issue by a Russian company with coupon payments linked to theMosPrime rate*. The proceeds from the bond issue will be used torefinance existing short-term debt of the company.
ZAO Raiffeisenbank Austria, Moscow acted as a Lead Manager of the issue,while Deutsche Bank, Morgan Stanley Bank, Commerzbank, WestLB Vostok,International Moscow Bank, VTB 24 and Uralsib were Co-Managers.
Total investor demand for this issue amounted to 3.8 billion RUB(approx. 110 million euros). The premiums to the MosPrime rate stated byinvestors in their proposals ranged from 110 to 207 basis points. Thebond is a quarterly coupon bearer with a 3-year maturity and hascall-options attached: On the day of each coupon payment starting fromthe 5th coupon, the issue is callable at 100.25 per cent of the facevalue.
Placement was performed through a public subscription procedure at theMoscow Interbank Currency Exchange (MICEX). The issue was 2.6 timesoversubscribed. As a result of the auction, the spread to the 3-monthMosPrime rate (5.43 per cent p.a. as of 5 March, 2007) was fixed at 143basis points (1.43 per cent). Thus the first coupon rate was set at 6.86per cent.
"This is the lowest coupon rate in the history of the Russian non-statecorporate bond market", said Patrick Butler, Board Member of RaiffeisenZentralbank Osterreich AG (RZB), responsible for Treasury and InvestmentBanking."The issue proves once again our capabilities on the Russianand CEE debt market. We are at the fore-front of market development inRussia, not only in our commercial but also in our investment bankingactivities", Butler added.
Raiffeisenbank is one of the leaders of the Russian corporate bondmarket. From 2001 through 2007, Raiffeisenbank acted as a leadmanager/co-manager of 105 corporate bond issues of total nominal valueof 318 billion RUB (approx. 926 million euros).
Pavel Gourine, Deputy CEO of Raiffeisenbank, responsible for corporatebusiness, commented:"The placement is another step in the evolution ofthe Russian corporate bond market. The premium defined in the course ofthe auction is an obvious evaluation of the issuer’s credit quality by the market. We believe, the deal structure will not only reduce the company’s loan maintenance expenses but will serve as an instrument for investors to bring down the risk of rate fluctuation and diversify credit risks. We are convinced that thesuccessful debut placement of this bond will support the increase in the number of issues with a floating coupon rate in the Russian bond market."
* MosPrime Rate is based on deposit rates provided by eightContributor Banks. MosPrime Rate is calculated every business daytogether with MosIBOR at 12.30h Moscow time. MosPrime Rate is calculatedas an arithmetic average of the provided rates disregarding the highestand the lowest and is calculated in per cent p.a. to two decimal places.ZAO Raiffeisenbank played a pivotal role in introducing this rate alongwith ZAO Citibank, when they jointly lead-managed a RUR Floating RateNote for the European Bank for Reconstruction and Development (EBRD).EBRD saw this innovation a significant contribution to the developmentof a transparent market; a believe which has been vindicated bysubsequent developments.
ZAO Raiffeisenbank Austria is a subsidiary of Raiffeisen InternationalBank-Holding AG, which operates one of the leading banking networks inCEE, with subsidiary banks and leasing companies in 16 markets. Morethan 11.7 million customers are serviced through over 2775 businessoutlets. In eight markets, the respective network bank is one of thethree largest local banks. Representative offices in Lithuania andMoldavia complement the Group’s presence in the region. Raiffeisen International is a fully consolidated subsidiary of Raiffeisen Zentralbank Osterreich AG (RZB), which owns 70 percent of the share capital. The remaining 30 percent of the shares are traded on the Vienna Stock Exchange. RZB is a leading corporate and investment bank in Austria, and the central institution of Austria’s Raiffeisen Banking Group, the country’s largest banking group.
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