Investors from Russia bought about half of the 5.5-year Eurobond offering of USD500 million from Polyus Gold International Ltd (PGIL) at the end of October, 2016.
According to Sberbank CIB capital markets managing director Olga Gorokhovskaya, Russian investors bought 48 percent of the bonds placed by Polyus. 27 percent of the bonds went to investors from continental Europe, including 13 percent to investors from Switzerland. Investors from the United States bought 12 percent of the bonds issued, while U.K. investors accounted for nine percent and investors from Asia and the Middle East for four percent. Banks bought 54 percent of the issuance; asset management companies and funds bought 41 percent; and private banks bought five percent.
The yield guidance for the notes was initially at about five percent, but then it got lowered to 4.75 percent (+/-5 bps). The yield was ultimately 4.7 percent.
The bid book for Eurobonds placed by Polyus Gold International Limited was more than three times oversubscribed and exceeded USD1.5 billion, the head of debt capital markets at VTB Capital Andrei Solovyev said.
“The interest in the deal was very high – there were more than 140 accounts in the book. The strong demand meant pricing could be fairly tight: the final yield level was very important for the company, and the bonds were placed at a fairly comfortable level for it,” he said.
The placement organizers were J.P. Morgan, Renaissance Capital, Sberbank CIB, and VTB Capital. The Eurobond road show took place from October 13 to October 18 in Moscow, London, New York, Boston, Zurich, and Geneva.
Polyus saw its net debt decline by USD228 million, or nearly seven percent, in the third quarter of 2016 to some USD3.241 billion as of the end of September. Polyus Gold International Limited’s net debt also declined seven percent to USD2.941 billion.
Polyus is the largest Russian gold mining company. It mines hardrock and alluvial deposits in the Krasnoyarsk territory, the Irkutsk, the Magadan, and the Amur regions, and also in Yakutia.
The main beneficiary of Polyus is the Suleyman Kerimov Foundation, founded by Suleyman Kerimov and Said Kerimov.
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