March 6, 2007. Russian juice-maker Lebedyansky JSC placed a RUR 1.5billion debut bond issue -- the first with coupon payments linked toMosPrime by a Russian company.
ZAO Raiffeisenbank Austria acted as the lead manager on the issue, withthe help of the following co-Managers: Deutsche Bank AG, Morgan Stanley,Commerzbank, WestLB AG, International Moscow Bank, Bank VTB 24, BankUralsib.
The bonds were placed via a public subscription procedure on Russia’s MICEX exchange. As a result of the auction the spread to the 3-month MosPrime rate (5.43% p.a. as of March 5, 2007) was fixed at 143 basis points (1.43%). Thus the initial coupon rate was set at 6.86% -- the lowest in the history of the non-state corporate bond market. The issue was 2.6 times oversubscribed.
The entire issue was placed during the auction, with investor demand (20orders) totalling RUR 3.8 billion. The overall premium to MosPrimeproposed by investors ranged from 110 to 207 basis points.
The RUR 1.5 billion issue is a quarterly coupon-bearing 3-year bond. Thecoupon rate equals the sum of a three month MosPrime rate fixed on thelast day of each coupon period with a premium of 143 basis points. Thebond has call-options attached: on the day of each coupon paymentstarting from the fifth coupon, the issuer may call the bonds at 100.25%of their face value.
The proceeds from the bond issue will be used to refinance existingshort-term debt owed by Lebedyansky.
Pavel Gourine, Deputy Chairman of the Board, Head of Corporate Banking&Corporate Finance Directorate, ZAO Raiffeisenbank Austria said:“The placement is another step in the evolution of Russian corporate bond market, raising it to international market standards. The deal is the logical conclusion of the tendency initiated by the European Bank for Reconstruction and Development, the first issuer to offer investors rouble bonds with coupon payments linked to MosPrime. The premium defined in the course of auction clearly represents an evaluation of the issuer’s credit quality. We believe the deal’s structure will not only reduce the company’s loan maintenance expenses but will be seen an instrument for investors to bring down the risk of rate fluctuation and diversify credit risks. We are convinced that the successful debut placement of OAO Lebedyansky is another shining example that will increase the number of issues with floatingcoupon rate on the market.”
Raiffeisenbank is ranked 10th in terms of assets among top Russian banksbased on 2006 results (CEA Interfax). At present the Bank disposes of 24branches in Moscow, 5 branches in Saint Petersburg and regional branchesin Ekaterinburg, Samara, Novosibirsk, Chelyabinsk, Nizhny Novgorod,Krasnodar, Krasnoyarsk and Perm. Raiffeisenbank is ranked 9th in termsof corporate lending based on 2006 results (CEA Interfax). Among theleading retail banks Raiffeisenbank is the 8th largest bank in Russia interms of consumer lending and 8th in terms of private deposits based on2006 results (CEA Interfax).
Raiffeisenbank is recognized as a leader on the Russian corporate bondmarket. In 2001-2007 Raiffeisenbank acted as a lead manager orco-manager for 104 corporate bond issues with a total nominal value ofRUR 317 billion.
Lebedyansky JSC (Moody’s – “Ba3”) is the largest natural juice producer in Eastern Europe (market share is 31.3%) and one of Russian baby-food market leaders. Lebedyansky produces Ya, Tonus, Fruktovy Sad and a wide range of FrutoNyanya. Based on the preliminary data, the company''s consolidated revenues in 2006 equaled USD 710 million, EBITDA – USD 137.5 million. As of October 1, 2006 the ratio of Debt/EBITDA was 0.61x. The company''s current market capitalization is over USD 1,640 billion.
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 Oesterreich 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.
MosPrime Rate is based on deposit rates provided by eight ContributorBanks. MosPrime Rate is calculated every business day together withMosIBOR at 12.30h Moscow time. MosPrime Rate is calculated as anarithmetic average of the provided rates disregarding the highest andthe lowest and is calculated in per cent p.a. to two decimal places. ZAORaiffeisenbank played a pivotal role in introducing this rate along withZAO Citibank, when they jointly lead-managed a RUR Floating Rate Notefor the European Bank for Reconstruction and Development (EBRD). EBRDsaw this innovation a significant contribution to the development of atransparent market; a believe which has been vindicated by subsequentdevelopments.