Eurobonds and syndicated loans
Otkritie Bank placed its first Eurobond in February 2004. Since then the bank has become a regular Eurobonds issuer in the international capital markets and made overall fourteen placements to finance seven senior loans and seven subordinated ones.
Over the years Otkritie Bank’s Eurobond deals were managed by Citigroup, Commerzbank, JP Morgan Chase, Deutsche Bank, ING, RBI, RBS, Societe Generale, UBS, UniCredit, GAZPROMBANK and VTB Capital.
On November 11, 2019, Otkritie Bank repaid timely and in full the senior Eurobond issue in the amount of USD 400 million (ISIN XS1503160571), which was placed in October 2016 at the lowest coupon level the bank ever achieved, i.e. 4.5% p.a.
Since 2016, Otkritie Bank has not made any new Eurobond placements. However, the bank’s management does not exclude the probability of new Eurobond issuances in the future.
Since 2001, Otkritie Bank has been successfully raising capital in the international debt markets, including through syndicated loans. Over the period, the Bank has raised financing through 18 syndicated loans for a total of over USD 1.9 billion.
In 2001, the Bank took out its first USD 17 million short-term syndicated loan to provide lending to gold mining companies; over time, the Bank raised eight more syndicated loans for the same purpose. These loans were used to refinance loans made by the Bank in the domestic market to provide lending to golf producers and exporters. These loans were well received by the market — the majority were heavily oversubscribed.
In 2006, the Bank took out its first USD 80 million unsecured, syndicated loan to provide lending to trading companies. The syndicated loan was followed by a USD 40 million club deal for Asian investors, and by a USD 60.5 million Schuldscheindarlehen syndicated loan, raised under German law as promissory notes. Continuing the successful trend, the Bank raised its first USD 180 million dual tranche loan in 2007. After the 2008-2009 global financial crisis, Otkritie Bank was one of the first privately-owned banks to raise a syndicated loan in the international market. The new loan was structured as a club deal, and the bids significantly exceeded the offer. This deal was also the first international syndicated loan since 2008 raised by a Russian bank without the support of international financial institutions (e.g. IFC, EBRD). After the Bank’s lending needs were reviewed, it was decided to lend the amount of USD 100 million sought by the Bank. This loan was repaid on time in August 2011.
In September 2011, the Bank again returned to the international lending market and raised a one-year loan to provide lending to gold mining companies, which was also heavily oversubscribed. The deal closed in October 2011 as a USD 200 million (the original amount sought by the Bank) club deal. This loan was repaid in October 2012.
In September 2011, Otkritie FC Bank tapped the international market for another 1-year gold-related loan which was oversubscribed again and closed in October 2011 as a club deal at the initial target amount of USD 200 million. The loan was repaid in October 2012.
In November 2013, the Bank raised a one-year USD 240 million loan to provide lending to gold mining companies, which was also oversubscribed. This loan was also structured as a club deal maturing in 2014, with a possibility of renewal for an additional year. This was the largest deal since the Bank first tapped the syndicated loans market in 2001.
In 2014, amidst political and economic turbulence, Otkritie Bank was the first Russian bank to return to the international syndicated loans market, raising in November 2014 a USD 120 million, one-year syndicated loan from a group of international banks to provide lending to its clients in the gold mining industry. The loan was arranged by Commerzbank, Citibank, Raiffeisen Bank International, JP Morgan Chase Bank, ICBC, ING, Societe Generale Group and AKA. The syndicated loan was repaid on time in 2015.
In December 2015, Otkritie Bank was the only Russian bank to raise a syndicated loan from a group of international investors. This loan was used to provide lending to clients in the gold mining sector. The loan was unsecured, implying that international lenders were willing to take direct credit risk in lending to Otkritie FC Bank. Lenders included UniCredit, AKA, Citibank, Commerzbank, Credit Suisse, Harbin Bank, ING, Oversea-Chinese Banking Corporation Limited, Raiffeisen Bank International and Société Générale Group. The loan was repaid in December 2016.
The successful closure of syndicated loans, especially in the post-crisis years, is a testament to the Bank’s financial stability and reliability, and the strength of the Bank’s relations with its international partners in the financial sector.
Details on the deals which have been previously closed: