VTB Capital has successfully placed two Meсhel bond issues worth RUB 10bn (RUB 5bn each). The tenor is 10 years, with a buy-back option in 3 years. The coupon is set at 8.25% p.a.
Bids came from over 50 investors. The books were 2.7 times oversubscribed, allowing placement below the initial marketing spread (8.75-9.25% p.a.) at a record low yield for the issuer.
Mechel is active in 12 countries, including Russia, Kazakhstan, Romania, Lithuania and Bulgaria. Total headcount is 90 thousand people. The company is Russia’s largest producer of coking coal concentrate. Mechel’s revenues for 9M 2010 reached USD 6.98 bn, net income amounted to USD 450mn according to US GAAP. Mechel is rated B1 by Moody’s.
Alexey Konochkin, Deputy Head of DCM at VTB Capital, said: “The marketing campaign was well-executed by the issue arrangers and generated a significant amount of bidding among the investor community. We take pride in the effort we put in closing this deal, with the coupon priced at a minimum for the issuer”.
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