Alfa-Bank issues ZFA-analogue of structural bonds

For the first time, CFA-analogues of structured bonds will appear on the Russian market, both in terms of the issue structure and in terms of circulation volume and maturity. Until now, issuers have placed DFAs similar to classic bonds or tied directly to the value of real assets. However, the lack of secondary circulation will limit investors’ interest in new instruments as well.

Alfa-Bank has decided to issue digital financial assets (DFA) tied to real financial assets — the value of LUKOIL shares and the value of the key rate.

The first issue of up to 300 million rubles. and a maturity of one month, in fact, is an analogue of structured bonds, actively placed by Russian banks (primarily Sberbank, VTB, GPB, Alfa-bank) among qualified investors. So, if the price of LUKOIL shares increased during the CFA circulation period, then the owner of digital assets receives only their initial value. If the share price has fallen, then the return value of the CFA is proportionally reduced. In any case, the bank pays an additional income of 1.7%, that is, in fact, the instrument guarantees an income of about 20% per annum.

For the second issue, the cost is pegged to the key rate, that is, the CFA income is floating.

As Denis Dodon, director of innovations at Alfa-Bank, explained, “the economics of the product is such that in order to maximize profitability for the client, secondary circulation was limited.” The bank is preparing other similar issues, which should “become a flagship product.”

Structured bonds, the yield of which is tied to the value of the underlying asset, are usually issued without capital protection. In them, various currencies of both friendly and unfriendly countries, debt market rates, including the key rate, individual assets or “baskets” of assets (securities, metals) and others act as underlying assets.

Often, they contain threshold values ​​for the value of assets, the overcoming of which leads to non-payment of income. Issue volumes range from several tens of millions of rubles to several billion rubles, and circulation periods range from several weeks to several years.

A number of previous issues by issuers on operator floors (IPs) were linked directly to the value of real assets. In particular, DFAs pegged to the value of precious metals were issued on the platform of Atomayza and Sberbank. At the sites of Atomayza and Alfa-Bank, DFAs were issued linked to the value of real estate (see “Kommersant” dated May 16). In addition, Atomize has issued more than a dozen CFA issues pegged to Norilsk Nickel shares, but at the first stage their sale is limited to the company’s employees.

The CFA variable-to-maturity issue on the Alfa-bank platform is close to Seligdar’s recent gold-pegged bond issue (see “Kommersant” dated April 25), says Pavel Sidorkin, Product Director of Atomayza.

Expanding the variety of underlying assets will make the market more attractive to corporate clients and attract additional liquidity to the market, Denis Jordanidi, CEO of Lighthouse, believes.

However, as Cheelee CEO Ruslan Sharov notes, the main obstacle to the development of the market is the lack of a platform for the secondary circulation of CFA.

Investors have the opportunity to buy structured bonds at secondary exchange auctions. However, the situation may improve in the near future, since in early August the Moscow Exchange was the first to enter the register of CFA exchange operators. In addition, it will be necessary to finalize regulation, including tax, to accumulate expertise, as well as to raise awareness of market participants and investors about a new class of instruments, according to the exchange.

Ksenia Kulikova