VTB Capital has successfully completed a public bond issue with a variable coupon, the value of which depends on the price of the ordinary shares of OJSC “MMC” Norilsk Nickel”. The issue volume amounted to 1bn roubles with 1 year and 218 days maturity.
Moody’s has assigned the bonds a rating of “Baa2” and they were placed and admitted to trading on the MICEX. The issuer is VTB Capital Finance which is part of VTB Capital. VTB Bank has guaranteed repayment of the bonds at a nominal value, as well as the payment of a fixed and an additional coupon.
This is the first VTB Capital Finance bond issue linked to single stock. In 2012-2013 VTB Capital Finance has performed eight structured issuances for a total amount of 11.5bn roubles linked to the gold prices, the MICEX index and the value of the Russian equities.
In accordance with the terms of the issue, the investors will receive additional profit in the event of an increase of the Norilsk Nickel share prices in the range of 5%-35% over the term of the bonds by a factor of 103% participation. The maximum value of this additional profit is limited to 30.9%, which corresponds to the increase of the share value by 35% over the life of the securities.
Regardless of the Norilsk Nickel share value, investors will get back the original investment in full, as well as a fixed coupon rate, which is payable semi-annually at a rate of 0.1% per annum.
Dmitry Suspitsyn, Head of Equity Structuring at VTB Capital, noted: “VTB Capital has significant experience on the market of structured products, which continue to be of considerable interest to institutional investors. A successful bond issue tied to the value of the shares confirms the demand for such solutions, as well as the ability of VTB Capital to develop and market such instruments on terms attractive to the investors.”
Head of Press