Rosneft Places Debut CNY 15 Billion Bond Issue
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Moscow Exchange registered the issue of bonds of the company “Rosneft» series 002Р-12, follows from the message of the trading platform.
“The debut issue of the company in yuan is unprecedented. This is the largest market corporate placement of bonds in the local Russian market in ruble terms in its entire history – 130 billion rubles. in equivalent,” Gazprombank added.
The bank representative also called the minimum coupon set by this issue and the level of yield in yuan a new and liquid benchmark for all Russian borrowers.
“The demand was colossal, they closed with oversubscription,” a Vedomosti source in Rosneft specified. The call will start on September 20th. Initially, it was planned that the placement volume would be at least 10 billion, but later it was increased.
In turn, the investment strategist of Arikapital Management Company Sergey Suverov said that the cost of funds raised (3.05%) is not only lower than the cost of other comparable Russian bond issues, but also lower than the annual base rate on loans from the People’s Bank of China and the performance of most bond issues largest Chinese oil and gas companies in the Chinese domestic market with comparable maturities.
“For almost 15 years, the yuan exchange rate against the US dollar has remained fairly stable. Since 2008, the exchange rate of the Chinese national currency has been kept in a narrow range of 6-7 yuan per dollar. This suggests that the cost of financing raised in yuan and US dollars can be compared with each other,” he added.
Suverov also recalled that, according to the Central Bank of the Russian Federation, the average interest rate on loans for more than a year in US dollars issued by Russian banks to non-financial organizations in 2017-2021 amounted to 5.14%, in the first half of 2022 – 5, 59%. Thus, the cost of attracting financing by Rosneft through the placement of bonds in yuan is more than 1.5 times lower than the average historical cost of bank lending in foreign currency on the Russian market.
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