Russian Railways to hold roadshow for CHF Eurobonds.

By bne IntelliNews January 22, 2013
Russian Railways (RZD) plans to hold a road-show on January 23-25 for a possible issue of CHF-denominated Eurobonds, PRIME reports citing a banking source. Barclays, Credit Suisse, VTB Capital will organize the roadshow. As reported by Cbonds citing deputy head of company's financial department Pavel Ilychev, until July RZD plans to issue infrastructure Eurobonds of up to RUB 100bn (USD 3.3bn) of 15 to 30 years. The infrastructure bonds will be indexed by inflation, the main investor of the issue being Pension Fund of Russia. To remind, in October 2012 RZD placed an additional issue of 10-year Eurobonds worth USD 400mn at 4.05% annually. The original issue was increased to USD 1.4bn. JP Morgan, RBS and VTB Capital organized the additional issue, demand for which reportedly stood at USD 1.5bn. Initially, RZD placed USD 1bn worth of 10-year Eurobonds yielding 5.7% annually in the end of March 2012. RZD also placed RUB 25bn worth of 7-year RUB-denominated Eurobonds at 8.3%, demand almost twofold exceeding the amount proposed. RZD in the coming 3-5 years plans to borrow RUB 60bn-RUB 80bn. This would include tapping the Eurobond market at least once a year, with the rest to be borrowed in RUB. Fitch Ratings believed that 7% cargo rail transportation tariff indexation proposed by the government as of January 1 2013 will not be sufficient to finance the investment program of Russian Railways (RZD, BBB/Stable) in the absence of other financing sources or other support from the state as the only shareholder of the company. RZD itself proposed 11% indexation. Fitch still expected subsidies and capital deposits from the state do support the operational activities and capital expenditures of RZD. At the same time the government reviewed additional way of support, such as state guarantees and investing reserves into long-term infrastructure projects.

Related Articles

Russias participation in Cyprus bail-out under question.

As Cyprus is trying to come up with new ways to raise EUR 5.8bn needed to secure the financing from ECB, EC, and IMF, Russia's participation in the package is not clear. According to the latest ... more

Fitch: Russian banks risks in Cyprus limited.

Fitch Ratings believes that resolution of the Cyprus crisis with a deposit levy or some other form of burden sharing involving creditors is unlikely to result in material losses for Russian ... more

Sources: Russia could triple oil exports to China.

Russia and China discuss contracts that would triple exports of Siberian oil through various transport corridors, Reuters reports citing unnamed sources in the industry. Rosneft is discussing ... more

Notice: Undefined index: subject_id in /var/www/html/application/controllers/IndexController.php on line 335
Dismiss