VTB Capital acted as lead manager and bookrunner on the placement of the first Russian infrastructure bonds backed by concession agreement rights. NPF VTB Pension fund became the anchor investor in the transaction.
VTB Capital is a stakeholder in the “Magistral dvukh stolits”, or “Two Capitals Highway”, consortium and acts as a financial consultant for the construction, financing and operation of 7 and 8 section of the high-speed M-11 “Moscow – St. Petersburg” road.
Oleg Pankratov, Head of Infrastructure Capital and Project Finance at VTB Capital, said: “Infrastructure investments are one of VTB Capital’s strategic business lines. Further developing this line continues to be our priority, and we retain a leading position in the implementation of infrastructure projects through public-private partnerships in Russia. The placement of infrastructure bonds will become an additional source of capital for “Two Capitals Highway” and will ensure that the construction, financing and operation of 7 and 8 section of the high-speed M-11 “Moscow – St. Petersburg” is delivered at the highest standards according to the schedule.”
Mikhail Yakunin, Senior VTB Vice President, Head of Financial Subsidiaries Division at VTB Bank, said: “This transaction allows NPF VTB Pension Fund to diversify its portfolio, while investing in a reliable, profitable, socially beneficial infrastructure project. A well-balanced investment strategy is instrumental in allowing the fund to effectively manage client accounts and ensure a steady rate of return. Over the period 2008-2014, NPF VTB Pension Fund demonstrated an estimated cumulative yield of 50 per cent”.
“Two Capitals Highway” holds the highest credit rating of A++, and the bond face value and coupon payments are secured by obligations of the Russian Federation under the concession agreement.
Construction of the Moscow - St. Petersburg highway is a strategic, federal-scale investment project vital for the development of the country’s transport infrastructure. Modern high-speed road will become one of the most important transportation routes in the Russian Federation, connecting its two largest metropolises.
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