Gazprom Places €1bn in Eurobonds

Russia's Gazprom has placed €1bn ($1.2bn) in six-year Eurobonds with a 1.5% coupon rate at the Euronext Dublin exchange in Ireland, the issue's organisers Gazprombank and VTB Capital reported on February 10.

Gazprombank's first vice president, Denis Shukalov, noted that the funds were secured at a record low rate for Russian borrowing on international markets. The terms were much better than a similar €1bn Eurobond placement last year, which had a higher coupon rate of 2.95%. Gazprom raised a further $2bn by tapping the Eurobond market in January.

Gazprom's initial guidance for the latest offering's yield was 1.75-1.875%, but this was lowered to a final yield of 1.50-1.55%, as demand reached €2.2bn. More than 210 investors took part in the issue, with demand from international investors accounting for 78% of the total order book. Investors from the UK bought 39% of the notes, while the same amount was acquired by European investors. A further 9% were obtained by investors from Russia and other members of the Commonwealth of Independent States.

The Russian state gas supplier's success on international debt markets comes despite renewed tensions between Russia and the West over the imprisonment of Russian opposition leader Alexei Navalny. However, the placement also comes after recent reports in the German press have suggested the Biden administration may be willing lift US sanctions on Gazprom's Nord Stream 2 project, in order to repair relations with Berlin. Work on the Danish section of the nearly-complete pipeline was resumed earlier this month after a break of over a year.