LONDON, June 18 (IFR) - Gazprombank is poised to become the first Russian state-owned issuer to borrow money in the international bond markets since the political crisis with Ukraine began in late February.
The lender has hired four banks to arrange investor meetings in London, Paris and Frankfurt next Monday and Tuesday, ahead of a potential benchmark-sized euro-denominated bond.
Gazprombank is expected to be the first of a trio of Russia’s leading state-owned financial institutions that could issue in the bond markets before the summer break.
The country’s biggest lender, Sberbank, has hired banks, according to sources, while development bank VEB has sent a request for proposals for a potential bond, said bankers.
Those two banks are also considering issuance in euros as Russian borrowers play it safe for the time being and avoid the US dollar market.
The first Russian bond deal since the Ukraine crisis escalated was also in euros. ABH Financial, the holding company of private lender Alfa-Bank, sold a 350m three-year bond earlier this month. That deal generated 1.3bn of demand suggesting investors in Europe, at least, remain keen to buy Russian debt.
Gazprombank, rated Baa3 by Moody’s and BBB- by both Standard & Poor’s and Fitch, has hired Credit Suisse, Deutsche Bank, Gazprombank Financial Services and SG CIB to arrange the bond offering.
The bank has one euro-denominated bond outstanding, according to Tradeweb, a 1bn 2018 note that is trading at a yield of 3.75%. That bond was sold last October and was Gazprombank’s first in euros in more than a decade.
Gazprombank is typically bracketed as a state-owned lender even though its biggest shareholder is Gazfond, a non state-owned pension fund, which holds a 47.4% stake. But state-owned Gazprom owns 35.5%, VEB 10.2%, while 6.3% is a combination of Treasury stock and retail ownership.
The last state-owned Russian issuer in the international bond market was Russian Railways, which sold a 500m nine-year note on February 27.
Reporting by Sudip Roy; editing by Alex Chambers