Corporate Communications

VTB Capital became the organizer of issue of the government bonds of Belgorod Region

15 August 2012

On 14 August RUB 5bn government bonds of the Belgorod Region with varying coupon yield and debt amortization were issued. The bookbuilding for this placement was closed on 9 August. The organizers of the issue were VTB Bank, VTB Capital, and FC Uralsib.

The first interest rate announced by the organizers during the compilation of the order book was in the range of 7.85-8.10%, which corresponds to a 9.03-9.30% yield. More than 30 market participants expressed interest in the issue, with the total demand of the market range exceeding RUB 6bn.
The first coupon rate set by the issuer has a rate of 8.0% per year, which corresponds to an effective yield of 9.19% per annum. The loan was placed in full and registered 67 transactions.

The issue has 20 coupon periods for 91 days. Repayment will occur in parts of the dates of payment. For instance, the 7 and 9 coupons: 25%; 11 and 13 coupons: 15%; 17 and 20 coupons: 10%. The coupon rate is fixed according to the schedule: 1, 2, 10, and 11 coupon periods: 8.0% per annum; 3 and 7 coupon periods: 10.0% per annum; 8 and 9 coupon periods: 9.0% per year; 12-16 periods: 7.0% per year; 17 and 8 coupon periods: 6.5% per annum; and 18 and 19 coupon periods: 6.0% per year.

Maturity of the bonds is 5 years and the duration of the loan is 2,47 years. The nominal value of one bond is RUB 1000. The release of these requirements is for inclusion in the Lombard List of the Central Bank of Russia.

Alexey Konochkin, Head of LDCM at VTB Capital, said: "The success of this issue has once again confirmed the high interest of investors to the Russian issuers – the subjects of the Russian Federation and municipal entities. This instrument provides a high yield and at the same time opens up new prospects for financing the Russian Federation regions."


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