10 October 2003 01:47
Rating action boosts Russian bond offerings NEW ISSUES:
Russian corporate issuers have been cashing in on this week's decision
by Moody's Investors Service to award Russia an investment grade credit
rating.
The rating action caused both Russian government and corporate bond prices to
rally sharply, enabling the mobile telephone operator Mobile TeleSystems
(MTS) to tighten the coupon on its Dollars 400m international bond by 25
basis points late on Wednesday.
CSFB and ING lead managed the deal.
And yesterday MMK Finance, a funding unit of the Russian steel company
Magnitorgorsk Iron and Steel Works, also tightened its pricing, with lead
managers ABN and UBS pricing a Dollars 300m bond to yield 8.25 per cent,
after earlier price talk of 8.5 per cent.
Other Russian deals which stand to benefit include an issue of around Dollars
1bn mooted by Yukos, and a planned bond by the largest retail bank Sberbank,
for which UBS has been mandated.
For Sberbank's bond, the sovereign upgrade may well mean an investment
grade rating.
Sberbank is 61 per cent owned by Russia's central bank and its deposits
are guaranteed by the state, so it is viewed as a quasi-sovereign issuer.
Moody's is expected to rate Sberbank before the bond sale.
"I think this deal will attract attention from a lot of the high grade
investors that have not been active in Russia previously," said Dennis
Holtzapffel, executive director, emerging markets syndicate at UBS.
In the pipeline, the market is still waiting for confirmation of a possible
Dollars 3bn to Dollars 4bn bond from Telecom Italia, while Hong Kong
billionaire Li Ka-shing's Hutchison Whampoa yesterday declined to
comment on talk that it was planning an issue of as much as Dollars 1.5bn.
Nalco, the US-based water treatment company is thought to be planning Dollars
1.8bn of high-yield bonds denominated in dollars and euros.
The deal is expected to comprise senior notes due 2010 and senior
subordinated notes due 2013.
Citigroup, Bank of America, Deutsche Bank, Goldman Sachs, JP Morgan and UBS
are managing the sale.
In the asset-backed market Mitchells & Butler, the owner of UK bar
chains, such as All Bar One, will next week begin the roadshow for a Pounds
1.9bn (Dollars 3.1bn) "whole business" securitisation lead managed
by Royal Bank of Scotland and Citigroup. The company, created in April by the
break-up of Six Continents, will use part of the funds raised to pay
shareholders a special dividend of Pounds 500m.
[FTI [The Financial Times]] |
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