Alfa Bank Issues $400mn Eurobond

Russia’s largest private lender, Alfa Bank, has issued a $400-million Tier 2 Eurobond, it said in a statement on Monday, according to Reuters.

The bank has previously said that if needed, it would borrow in rubles this year to boost its capital. It raised 10 billion roubles (about $154 million) through a senior ruble Eurobond issue in January.

“In the last few days, we have held a series of intensive meetings with investors in Switzerland and conference calls with global investors,” Alfa Bank’s CFO Alexey Chukhlov said in a statement. “Having received clear confirmation that investors are interested in acquiring Alfa Bank’s subordinated Eurobond, we began to closely monitor the market situation in order to launch the deal at the best possible moment.”

Demand exceeded the initial size of the deal by more than 1.5 times, the bank said. It plans to use the funds to increase its loan portfolio.

More than 60 institutional investors and brokerages from Europe, Britain, Switzerland, and Asia took part in the deal, and Russian investors showed “significant interest”, Alfa added.

After launching with initial price thoughts in the 6% area, the bank tightened guidance to 5.95%, IFR, Refinitiv’s capital markets news service, reported earlier on Monday. The 10.5-year bond is non-callable for five-and-a-half years. The issue was organized by Alfa Bank, JP Morgan, and UBS.

Alfa Bank is the largest private bank in Russia. At the end of the first half of 2019, its individual customer base reached 16.5 million customers, while the bank also served 640,000 legal entities.