Demand for Gazprom bonds pegged to RUONIA exceeded 71 billion rubles

Investor demand for the debut issue of Gazprom bonds with a variable coupon pegged to the RUONIA rate exceeded RUB 71 billion. This was reported in the press service of Gazprombank.

“A wide range of Russian institutional investors took part in the issue. The total demand in the order book at the peak exceeded 71 billion rubles. About 40 applications were submitted from banks, management companies, private pension funds, insurance and investment companies, as well as private investors,” it was reported.

It is specified that the order book for bonds was closed on April 7. The bonds have a five-year term. Coupons on them will be calculated as the RUONIA rate plus 130 bp.

Initially, it was planned that the spread would be 145 – 155 bp, and the volume of bonds placement was expected at the level of 40 billion rubles. However, due to the fact that investor demand turned out to be 1.7 times higher, “Gazprom» was able to revise the spread target for RUONIA and fix it at 130 bp. “The estimated premium to the secondary yield of OFZ pegged to RUONIA was 95 bp. Thus, “Gazprom“set a new important benchmark for pricing in the Russian market,” Gazprombank added.

Previously, RUONIA-linked bonds were issued by development institutions VEB.RF and Dom.RF with a spread of 170 bp and 135 b.p. respectively.