Gazprom Places $2.6bn in Eurobonds
Russia's Gazprom has raised nearly $2.6bn from the placement of perpetual Eurobonds, it announced on October 27, adding it would use the funds to refinance its existing debt.
The state gas supplier placed $1.4bn in US-denominated notes and €1bn ($1.2bn) in euro-denominated bonds. Overall investor demand exceeded $7.4bn, which Gazprom said represented the highest level of interest in its Eurobond offerings since 2013.
The share of foreign investors' applications amounted to 80%. Continental European investors accounted for the largest share, followed by investors from the UK, then Russia, the US and Asia and other regions. Some 220 investors took part in the US dollar issue, while 170 participated in the euro issue.
Perpetual bonds are notes without a maturity date and are considered more a type of equity than debt. They offer a steady flow of interest for investors, but are not redeemable. Gazprombank subsidiary Bank GPB International and J.P. Morgan Securities acted as joint global coordinators and bookrunners for the issues, while Credit Agricole Corporate and Investment Bank and Sberbank CIB acted as joint lead managers and bookrunners.
"Considering a high investor interest in hybrid instruments, Gazprom is looking at the possibility of placing in the Russian market the first perpetual subordinated bond issue in rubles," the company said.
Gazprom's net debt came to rubles 3.68 trillion ($53bn) at the end of June, up 16% from six months earlier due to ruble devaluation. The company saw net profits almost halve year on year in the second quarter, on lower prices and weaker gas sales in Europe. It is due to report its third-quarter results sometime in late November.