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Private joint stock company commercial bank “Gazbank” has attracted financing through the debut issue of credit linked notes

May 21, 2007
Private joint stock company commercial bank “Gazbank” has attracted financing through the debut issue of credit linked notes

Private joint stock company commercial bank “Gazbank” has attracted financing through the debut issue of credit linked notes (CLN) on 15 May 2007. The issue size was USD100 mn. Bank of Moscow acted as the sole lead manager of the issue. Investment company BFA was a co-manager of the issue.

Gazbank was the first bank in the Samara region to tap international debt capital market. The issue was placed with a 3 year maturity and a 2 year put option for investors. The coupon rate was 9.75% payable on the semi-annual basis. Investor meetings were held in Moscow, London and Singapore.

The notes were placed among the diversified investor base of commercial banks, hedge-funds, private banks and asset management companies from the UK, continental Europe, south-east Asia and Russia.

The proceeds from the issue will be used to finance the Gazbank priority projects such as lending to SME sector, consumer finance and the expansion of the mortgage lending.

According to Iliya Gutkovich, the Director of Treasury of Gazbank, CLN’s are used in order to diversify the market risks and hedge against the dependency on local markets. Apart from benefiting from attracting the funds with the lower market rate, this international placement is an important step towards further strengthening the image of Gazbank. “We are satisfied with the service that Bank of Moscow provided for us. Despite the fact that it was the debut for us as a borrower and for Bank of Moscow as a sole lead manager, the issue was a success and it will help us to decrease the cost of funding in the future. We choose Bank of Moscow to do our debut CLN transaction not only of the high credit rating of the bank and leading positions in ruble bond market, but also because at the moment investors pay much attention to the liquidity of the issue. Bank of Moscow can offer the marketmaking service of our issue, repo transactions, that gives additional comfort and service to investors and increases the deal attractiveness.” — said Vladimir Semin, the first deputy of the chairman of the board of Gazbank.

“Gazbank is the leader among the banks of the Samara Region and is among the top-10 biggest banks in the Povolzhskiy Federal District. According to RBC rating, Gazbank is 15 th in terms of capital efficiency, № 26 in terms of return on assets and № 39 in terms of absolute profit among all Russian banks!” — said Igor Sukhanov, the Head of IB of Bank of Moscow — “For the Bank of Moscow this placement is the first experience in the international markets. We have many other in our pipe-line, some of which are quite innovative. Eventually we are planning to occupy the leading position in this market.”

  • Status
    redeemed
  • Country of risk
    Russia
  • Redemption (put/call option)
    *** (***)
  • Amount
    100,000,000 USD
  • М/S&P/F
    — / — / —