Vneshtorgbank (VTB) has offered to buy its subordinated 6.315% 2015 Eurobonds at 64% of their face value, with VTB Capital acting as tender agent for the offer, which expires on Monday 30 March at 16.30 GMT.
Russia’s second-largest bank has been buying up this bond in the secondary market over the past couple of years and has already repurchased 54.3% of the US$750m issue at its secondary trading price of around 62 cents. If all debtholders accept the offer, VTB would save around US$47m in annual interest payments and US$270m in principal.
The bond, VTB’s first subordinated issue (a 10-year non-call five), was launched in 2005 and is callable next year. Explaining the reasoning behind the tender, Andrey Soloviev, global head of DCM at VTB Capital, said: “We were actively buying these bonds in the open market because they were significantly undervalued”.
"Recently we have executed a few block trades and reached the threshold when we made a decision to inform Luxembourg stock exchange about our current holding and simultaneously announced a public tender for the remaining paper."
"Investors have been offered a premium to an average transaction price which was of 62% of principal amount over the last two months".
Head of Press