VTB prepares coupon income payments on Eurobonds for “friendly” non-residents

Next week, VTB Group will start notifying customers about the payment of coupons for 2022 on four Eurobond issues. This was told to journalists by Deputy Chairman of the Board of VTB Dmitry Pyanov. Payments will be made in rubles to holders of Eurobonds from “friendly” countries, as well as to residents whose securities were registered in foreign depositories. Payments relate to three issues in US dollars – maturing in October 2022 (coupon 6.95%), maturing in June 2035 (coupon 6.25%), perpetual (coupon 11.577%), as well as one issue in Swiss francs – due in October 2024 (coupon 4.0725%). “We have completed both the analysis of this information and an internal examination of what technology we will use to pay “friendly” clients hidden behind foreign depositories,” Mr. Pyanov said.

In total, the bank collected questionnaires from approximately 400 holders of bonds worth about $290 million. This is 6% of the total volume of these securities in circulation and 16% of the total volume of these securities accounted for in foreign depositories. The maximum amount of payments is estimated at 9.1 billion rubles. Approximately 5% of these 400 investors are Russian individuals and controlled foreign companies of Russian residents, the bank’s top manager specified. Coupon payments will be made to holders after filling out a special package of documents, payment will be made to an account opened with VTB.

Issues related to the possible issuance of replacement bonds will be decided by VTB Bank towards the end of the third and beginning of the fourth quarters of 2023. “We understand that for a number of subordinated instruments we are not able to issue “mirror” bonds due to the fact that they were issued by us before the “Basel period”, respectively, and now with the same write-off or conversion triggers, we will not be able to register data instruments due to the fact that now they are registered according to the Basel principles,” said Dmitry Pyanov. According to him, this is one of the main problems in the ability to directly issue replacement bonds without capital losses, which is an important factor for VTB.

Olga Sherunkova