Maturity:18 February 2026
Issue/fixed reoffer price:100
Spread at reoffer: 344bp over mid-swaps
Launched:Wednesday, September 24
Payment date:October 2
Joint books: Gazprombank, JP Morgan, Renaissance Capital, VTB Capital
Guidance began at 5.25%-5.375% on Wednesday morning before being tightened to 5.125% area. The note was printed later in the day at par with a 4.95% coupon.
The book was over $1.3bn, with a surprisingly high proportion of US offshore demand: 20% of allocations.
Before the deal was issued, there was uncertainty as to how investors would respond to an offering from STLC. It was the first time a fully state-owned Russian company had tried to tap the bond markets since the most recent round of US sanctions against the Russian government in early August.
The issuer printed Reg S only and not 144A, just because it was easier and more expedient to do the paperwork for that format. But it was remarkable to see such strong US offshore demand for a Reg S note. It shows there is clearly a bid for this kind of quasi-sovereign, index-eligible name.
Whenever a state-linked company comes to market, the name has to be assessed, together with the backdrop of the macro and geopolitical situation of the country. There was still a lot of interest in this deal.
The new issue premium was definitely negative. STLC’s 2025 bonds had been trading at around 4.86%, and this new 6.5 year bond was sold with a yield of 4.95%.
US offshore 20%
Asia/Middle East 9%
Distribution by investor type
Banks/private banks 46%