09.07.2019

Eurotorg raises RUB 5 billion in russian bond market debut

Eurotorg LLC (“Eurotorg” or the “Company”), the largest food retailer in Belarus, announces the successful pricing of its debut RUB-denominated bond offering. The Company will place RUB 5 billion of five-year unsecured bonds with a coupon of 10.95%.

Completion and settlement of the transaction are expected to take place today. The bonds have been admitted to listing on Moscow Exchange.

Andrey Zubkou, CEO of Eurotorg, said:

“The successful pricing of our debut RUB-denominated bond represents another important landmark for Eurotorg. Having achieved significant process in reducing our debt burden over the past year, we are continuing to look for ways to further optimise our overall debt profile. Adding RUB-denominated debt gives us an additional source of long-term unsecured financing. As a result of this issuance, we will have a more flexible repayment schedule and an increased average maturity of our debt portfolio.

“We are proud to once again be showing the way for Belarus in international capital markets, this time by re-opening the attractive Russian market. We are aiming to establish a long-term presence on the Russian capital markets, and see this transaction to be just the first step. We hope that this transaction will serve as a positive example for other Belarusian borrowers coming to market in future.”

Yury Denisov, CEO of Moscow Exchange, said:

“We are pleased to welcome an issuer with a strong credit rating to Moscow Exchange. Eurotorg's business model and the retail sector more broadly are well known and understood by Russian and international investors, and this helped drive strong demand for the bond issue of this Belarusian retailer. We are the investment hub for issuers from neighboring CIS countries, offering the convenient market infrastructure needed for successful placements. Thanks to high levels of demand for high-quality issuance Moscow Exchange remains the major regional platform for capital raising, with 97 corporate issues in the first half of 2019 for a total of RUB 1.3 trillion.”

Denis Shulakov, Senior Vice-President at Gazprombank, noted the success of the transaction:

“Demand was more than twice the offer size, at around RUB 13 billion, and investors placed more than 500 orders. The offering attracted demand from a range of investors including banks, management and investment companies, Western funds and retail investors. This illustrates the high levels of interest in the Russian market and appetite for RUB-denominated issuance – including from international issuers – among not just Russian but also international investors.”

Thanks to having a Russian credit rating, Eurotorg was able to tap a wide and deep pool of investors for its RUB bond. Eurotorg in May 2019 became the first non-Russian corporate to be aassigned a credit rating by a Russian agency when Expert RA (“RAEX”) assigned its expected RUB-denominated bond a preliminary rating of RuA– with a stable outlook. RAEX also assigned the Company an issuer credit rating of byA+ with a stable outlook.

The bonds were issued by a special purpose vehicle, LLC Retail Bel Finance, which is incorporated in Russia and the corporate management of which is carried out by a professional corporate services provider.

BCS Global Markets, Gazprombank, Credit Bank of Moscow, REGION Group of Companies and Renaissance Capital acted as arrangers. LECAP acted as transaction legal counsel. LCPIS has been appointed note trustee in accordance with Russian law.

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