Russian Railways to issue additional Eurobonds worth up to GBP 1bn.

By bne IntelliNews May 6, 2011
Russian Railways (RZD) is going to decide on issuing additional Eurobonds worth up to GBP 1bn by the end of May, head of the company Vladimir Yakunin announced. To remind, in the end of March 2011 RZD successfully placed GBP 350mn worth of 20-year Eurobonds at 7.487% annual coupon rate. This made the longest maturity of Eurobonds issued by Russian borrower in the past three years. More than 70 investors applied for the issue. In April 2010 RZD placed USD 1.5bn worth of 7-year Eurobonds at a coupon rate of 5.739%. As reported, IFRS net profit of Russian Railways more than quadrupled y/y to RUB 110.5bn in H1/10 vs. RUB 25bn seen in H1/09. Companys IFRS net profit almost doubled y/y to RUB 152.2bn in 2009. In H1/10 revenues increased by 22% y/y to RUB 651bn, while EBITDA jumped 85% y/y to RUB 205bn. Recently Fitch Ratings affirmed long-term Issuers Default Rating (IDR) of Russian Railways at BBB, outlook Stable. Agency attributed the affirmation to full state ownership of the company, its strategic and systemic economic importance, as well as expected government support for the company. Russian Railways is 100% owned by the government.

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