Interest in ecology: REO bonds are quoted at 102% above face value

Bonds of the Russian Environmental Operator are quoted at 102-102.5% higher than their nominal value, which indicates high investor interest not only in the field of waste management, but also in the environment in general.

Information about high quotes was announced by REO General Director Denis Butsaev at the plenary session “Clean” economy: reconfiguring approaches to production and consumption” on the track of the Russian Environmental Forum (REF) at the Wasma-2024 forum on Tuesday, March 19. The head of REO also shared data on the progress of the industry reform for municipal solid waste (MSW) management and the active formation of a circular economy in Russia.

“The demand for our bonds exceeds the capacity to issue these bonds. On the market they are quoted above their nominal value, now 102-102.5% of the nominal value. The tool showed high demand on the market and the versatility of its application. We have issues that we issue only for a certain category of investors, and there are those that we issue for everyone. Exchange issues of our bonds were purchased by private investors, including individuals,” Denis Butsaev said in his speech.

He clarified that we are talking about a mechanism for the redemption by large institutional investors of bonds issued by REO with a coupon rate of KS+3-3.5% for 12 years. According to the head of REO, now the attitude of major financial institutions towards investments in the industry has changed. This happened thanks to the formation of a regulatory framework, as well as the adoption of regional infrastructure development plans.

“And we discussed a mechanism that would make it possible, first of all, to interest large state-owned banks in purchasing these bonds. They even went so far as to have a special program with Rosselkhozbank. <...> I’m not talking now about convincing, for example, Sberbank or Rosselkhozbank of the need to support the industry, based on government objectives. I’m saying that private investors believed in this, this is a completely different level of trust, and they invested their money, receiving profitability and return on invested capital,” added the head of REO.

In his speech, Denis Butsaev also spoke about the creation of waste management infrastructure in the country, regional experience in implementing MSW management reform and infrastructure development, digital projects for the development of the MSW management industry (FGIS UTKO, flyover of landfills), a new mechanism for extended producer responsibility (EPR) ), development of technologies for involving secondary resources into circulation.

Let us remind you that the company “Russian Ecological Operator” was created by Presidential Decree on January 14, 2019. Its key task is to create an integrated system for the management of municipal solid waste (MSW) in Russia. This task meets the goals of the national project “Ecology”. Its solution is necessary to reduce the volume of solid waste disposal and thereby reduce the environmental burden on the population. The goal by 2030 is to sort 100% of the volume of MSW and reduce by 50% the MSW that goes to landfills. At the same time, achieving such high indicators is impossible without building a circular economy.