Dim sum-placement: why “RusHydro” is offshore yuan

“RusHydro” became the first 2014 Russian Issuer to place bonds in offshore yuan. The company took 1.5 billion yuan under 6,125%. In Russia it was possible to take cheaper, but RusHydro overcharged for access to the Asian market

Photo: Alexey Filippov / RIA Novosti

Energy company “RusHydro” became the first Russian non-banking the borrower, which has issued “dim sum bonds” — Eurobonds denominated in offshore Chinese Renminbi (in circulation outside the Chinese mainland). As stated in the message of the company, the volume of placing of three-year Eurobonds amounted to 1.5 billion yuan (14.4 billion rubles), the rate of return — 6,125%.

Previously, Russian borrowers such Eurobonds were placed only banks — VTB, Gazprombank, Russian agricultural Bank and Bank “Russian standard” (six issues for a total of 6.75 billion yuan). The last location of the “dim sum bonds” held in the winter of 2014, the Issuer was Gazprombank. To date, they are all repaid.

Asian investors bought more than 82% of the Eurobonds ‘ issue of RusHydro, the Russian investors — 17% of the papers. The placement was organized by Gazprombank, JP Morgan and “VTB Capital”. The funds had 69% of the issue, banks bought 31%, said the head of debt capital markets “VTB Capital” Andrey Soloviev. He added that during the placement the volume of the order book at the height amounted to 2.5 billion yuan, so the benchmark yield was twice dropped from the original 6.25% to 6,125–6,15%, and then to the final 6,125%.

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