EDB Successfully Placed Eurobonds for $500 Million
Today, the Eurasian Development Bank (EDB) will issue its Eurobonds with a maturity of five years for a total of $500 million. On 22 September the Bank set yield to maturity for this issuance at 7.375% per annum. The Eurobonds will be issued under Rule 144a, Regulation S. The arrangers are Deutsche Bank, JP Morgan and Royal Bank of Scotland. The book-building process indicated that demand overtakes supply by more than ten times, with the total book exceeding $5 billion. Experts generally agree that this issuance has been set a fair valuation. It has the best placement terms compared with other Russian and CIS Eurobonds issuances in this year.
“Such a success and the high interest in the Bank’s securities shown by international investors are due to the high quality of its assets, its sound development strategy, and its clear and transparent investment decisions”, said Igor Finogenov, Chairman of the EDB Executive Board. “Undoubtedly, the Bank’s status as the unique to Eurasia international financial organisation has also played a role”.
According to Finogenov, “this successful project will enable the Bank, despite the persisting financial crisis and unfavourable economic situation, to implement its investment strategy and build up its investment portfolio without additional injections by its founders, Russia and Kazakhstan. The proceeds of this transaction are intended for implementing critical projects in Russia, Kazakhstan and other member states of the Bank, Armenia and Tajikistan”.
Yevgeny Prilepsky, member and Deputy Chairman of the Executive Board in charge of the Bank’s investment policy, commented that “the issuance of Eurobonds under the EMTN Programme has indicated that the selected placement strategy is correct. Investors on the market show considerable interest in international development institutions that demonstrate a transparent policy towards the lending process and investment decisions. An important role in stirring up this interest belonged to the dynamics of the Bank’s project portfolio which has reached $1.2 billion, coupled with the Bank’s high quality investment assets”.
Dmitry Krasilnikov, member of the Executive Board in charge of corporate finance and interaction with financial institutions, commented that “an appetite on all major global stocks was whetted by the Bank’s supranational status and sound financial performance, particularly, capitalisation, leverage and short-term liquidity levels. Due to the selected pricing policy, the yield of 7.75% per annum initially announced by the arrangers was later on reduced to 7.375 %. The ratings assigned to this issuance by Moody’s, S &P and Fitch were А3, ВВВ and ВВВ, respectively”.
This is a scheduled, $3.5 billion Eurobond issuance under the Bank’s EMTN Programme which was registered on the London Stock Exchange in the end of the last year. In April to July 2009, the Bank issued and placed in Kazakhstan its Eurobonds in two tranches for a total of 20 billion tenge (about $133 million). It is expected that in the near future the EDB will enter the rouble-denominated borrowings market in Russia.