For the first time in Russia VTB Capital made a public placement by issuing rouble exchange traded bonds with a variable coupon linked to the price of gold. The volume of transaction is RUB 1bn with a tenor of 1 year and 10 days. The maximum value of the variable coupon is limited to 20%. The bonds are covered by VTB Bank suretyship.
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Under the terms of the bond issue, investors’ profits will come from rising gold prices and will be paid as a variable coupon at the end. In the event that the price of gold price falls, clients’ initial investments will be returned fully plus a fixed coupon of 0.1% p.a. The bond issuer is VTB Capital Finance, which is a part of VTB Capital. The bonds have Baa1 (sf) rating assigned by Moody’s and will be traded on the MICEX-RTS exchange.
This is the third issue under the unique domestic structured bond programme registered by VTB Capital Finance in December 2011. Previous tranches were linked to MICEX and were issued in June and August 2012.
Vitaly Bouzoveria, Head of Fixed Income Sales & Trading at VTB Capital, said: "VTB Capital continues to expand its range of investment products and services within the business development strategy. Starting a new unique instrument for a wide range of investors became a significant event on the Russian market. The price of gold continues to rise and we are confident that this new instrument will find a great demand due to attractive conditions and high security."