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Capital Market Borrowings

Eurobonds

Otkritie FC Bank placed its first Eurobond in February 2004. Since then the Bank has become a regular issuer in the international capital markets tapping the market six times with senior issues and four times with subordinated ones. Five senior issues and two subordinated issues have been redeemed upon maturity. 

Over the years Otkritie FC Bank’s Eurobond deals were managed by ING, Commerzbank, Citigroup, JP Morgan Chase, Deutsche Bank, RBS, UBS, GAZPROMBANK and VTB Capital. 

In early 2010, Otkritie FC Bank tapped the international capital markets with a USD 350 million subordinated Eurobond issue with 5.5-year maturity, which was placed on 14 April 2010. The deal generated very strong demand with over 100 investors coming in with orders exceeding USD 600 million. This transaction represented the most successful placement by Otkritie FC Banking Group with the tightest pricing and the largest size so far. Despite strong competing supply from Russia, CIS and emerging markets which tended to price at the wide end of price guidance and UST market volatility, this transaction was priced below the original 9.25% area guidance at 8.75%. 

The next Eurobond issue was placed on 14 October 2010. It was a USD 400 million senior issue with 3-year maturity, the Bank’s fifth senior and seventh overall issue, also the largest Eurobond issue for Otkritie FC Bank so far. The initial price guidance and solid order book allowed an increase in the planned deal size. The deal attracted more than 90 accounts from 15 different countries and was priced at 6.5%. The issue was redeemed upon maturity.

Otkritie FC Bank completed its next deal in the end of April 2012. It was Reg S/144A USD-denominated subordinated lower tier 2 offering for Otkritie FC Bank. This USD 500 million 7-year offering represents the largest subordinated Eurobond issue by a Russian private bank and marks the longest non-callable subordinated debt transaction out of Russia. Eurobonds were placed on 26 April 2012. As a USD 500 million subordinated issue with 7-year maturity, this facility is the largest Eurobond issue for Otkritie FC Bank so far. The offering is Otkritie FC Bank's first Eurobond issue pursuant to Rule 144A, which allowed it to access the qualified institutional buyer investor base in the US. This long-term issuance was met with good demand and received over 120 orders, 75% were allocated to investors outside Russia. 

The next placement was subordinated and effected in two stages. On the first stage in December 2012 the issue was priced but not listed. The coupon was fixed at 10%, the bonds carrying a 7-year maturity. On the second stage in June 2013 the bonds were listed on the Irish Stock Exchange. In August 2014, the documentation was amended to implement new Basel III requirements.

The most recent Eurobond issue was completed in the end of April 2013. This was a senior issue worth USD 500 million maturing in 2018. It was priced at 7.25%. 

Currently, Otkritie FC Bank has three outstanding bond issues — one senior, and two subordinated — for a total of USD 1.3 billion and Khanty-Mansiysk bank Otkritie has two outstanding subordinated bond issues for a total USD 300 million.

Issuer

Amount

Date of issue

Maturity date

Tenor

Coupon rate

Type

Issue rating

OFCB Capital Plc. (Ireland)

$500,000,000

25 April 2013

25 April 2018

5 years

7.25% p.a. payable semi-annually

Senior LPN issue, Regulation S/144A

Moody’s: Ba3

OFCB Capital Plc. (Ireland)

$300,000,000

17 December 2012

17 December 2019

7 years

10% p.a. payable semi-annually

Subordinated LT2 LPN issue, Regulation S

Moody’s: B2

OFCB Capital Plc. (Ireland)

$500,000,000

26 April 2012

26 April 2019

7 years

10% p.a. payable semi-annually

Subordinated LT2 LPN issue, Regulation S/144A

Moody’s: B2

BKM Finance Limited

$200,000,000

18 June 2013

18 June 2023

10 years

9.15% p.a. payable semi-annually

Subordinated LT2 LPN issue, Regulation S

Moody's B3

OIM ABS Limited

$100,000,000

28 January 2013

28 January 2020

7 years

10% p.a. payable semi-annually

Subordinated LT2 LPN issue, Regulation S

-

Syndicated loans

Since 2001, Otkritie FC Bank has successfully obtained funding in the international markets, raising among other eighteen syndicated loans in the aggregate principal amount of over USD 1.9 billion.

The Bank’s debut USD17 million Gold Secured Short-Term Syndicated Loan Facility in 2001 raised a further eight purely gold-related syndicated loans. The proceeds of these facilities were used to refinance domestic loans granted by Otkritie FC Bank to its customers involved in the mining and exports of gold. These gold-related facilities received positive response from the market and the majority were significantly oversubscribed. 

Otkritie FC Bank raised its first unsecured syndicated trade-related loan of USD 80 million in August 2005 followed by a USD 40 million club deal focused on Asian investors and a USD 60.5 million Schuldscheindarlehen in 2006. Continuing this successful trend Otkritie FC Bank closed its first dual-tranche loan in 2007 which was the largest international syndicated loan raised by the company at USD 180 million. 

After the global crisis, Otkritie FC Bank was one of the first private banks to tap the international syndicated loan market in September 2010. The new facility was structured as a gold-related club loan and was heavily oversubscribed. The transaction was also the first international syndicated loan since 2008 to have been successfully completed by a Russian private bank without the support of a multilateral institution. Following a review of Otkritie FC Bank funding needs it was decided to close the facility at the initial target amount of USD 100 million, which was duly repaid in August 2011. 

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, Otkritie FC Bank raised 1-year gold-related loan amounted to USD 240 million and oversubscribed as well. The loan in the form of club deal matured in November 2014, whereas the agreement stipulated an option to extend it for another year. This was the largest syndicated loan that Otkritie FC Bank ever raised. 

In 2014, in the situation of political and economic instability Otkritie FC Bank was the first Russian bank which tapped the international syndicated loan market and in November 2014 successfully raised from a group of foreign banks a 1-year syndicated loan amounted to USD 120 million for the purpose of refinancing loans granted by the Bank to Russian gold-mining companies. The lead arrangers of the loan were Commerzbank, Citibank, Raiffeisen Bank International, JP Morgan Chase Bank, ICBC (Moscow), ING Commercial Banking, Societe Generale Group, AKA. The loan was duly repaid.

In 2015 Otkritie FC Bank was the only Russian bank to raise a syndicated loan. The loan was received in December, it matures in one year and has an extension option for another year. The proceeds were used to provide financing to the Bank’s corporate clients in the Russian gold mining industry. The loan is unsecured meaning that the lenders accept the direct risk associated with the provision of the loan to Otkritie FC Bank. The lenders are UniCredit, AKA Ausfuhrkredit-Gesellschaft mbH, Citi, Commerzbank Aktiengesellschaft, Filiale Luxemburg, Credit Suisse, Harbin Bank, ING Bank, Oversea-Chinese Banking Corporation Limited, Raiffeisen Bank International AG, Societe Generale Group.

The success of all post-crisis transactions is a testament to Otkritie FC Bank continued solid financial performance as well as the strength of its banking relationships. 

 Details on the deals which have been previously closed:

Amount

Type

Number of lenders

Date of issue

Date of repaiment

US$ 185,000,000

Unsecured gold-related syndicated loan facility

11 financial institutions

December 2015

December 2016

US$ 120,000,000

Unsecured gold-related syndicated loan facility

9 financial institutions

November 2014

November 2015

US$ 240,000,000

Unsecured gold-related syndicated loan facility

15 financial institutions

November 2013

November 2014

US$ 200,000,000

Unsecured gold-related syndicated club loan

13 financial institutions

October 2011

October 2012

US$ 150,000,000

Unsecured trade-related dual-tranche syndicated facility

22 financial institutions

September 2007

Tranche A: September 2008

US$ 135,000,000

Unsecured gold-related syndicated loan facility

24 financial institutions

May 2008

May 2009

US$ 40,000,000

Schuldscheindarlehen

8 financial institutions

December 2007

December 2008

US$ 47,000,000 + €UR 5,000,000

Unsecured syndicated club deal

6 financial institutions

November 2007

November 2008

US$ 185,000,000

Unsecured gold-related dual-tranche syndicated facility

Schuldscheindarlehen

22 financial institutions

March 2007

Tranche A: March 2008

Tranche B: September 2008

US$ 60,500,000

Unsecured trade-related syndicated loan facility

15 financial institutions

December 2006

December 2007

US$ 80,000,000

Unsecured syndicated club deal

24 financial institutions

July 2005

Extended: July 2006

Repaid: July 2007

US$ 40,000,000

Secured gold-related syndicated loan facility

9 financial institutions

September 2006

September 2007

US$ 150,000,000

Secured gold-related syndicated loan facility

33 financial institutions

December 2005

December 2006

US$ 100,000,000

Secured gold-related syndicated loan facility

18 financial institutions

December 2004

December 2005

US$ 64,000,000

Secured gold-related syndicated loan facility

15 financial institutions

December 2003

December 2004

US$ 47,000,000

Secured gold-related syndicated loan facility

11 financial institutions

December 2002

November 2003

US$ 17,000,000

Secured gold-related syndicated loan facility

6 financial institutions

December 2001

November 2002