Russian Railways places first ever green perpetual bonds

25.09.2020

On 24 September 2020, Russian Railways closed the book for the first perpetual bonds in Russia’s history, which received confirmation of compliance with Russian and international green financing standards.

The book building was carried out at a floating coupon rate with an initial premium guidance of 1.85% above the zero-coupon yield curve of Russia’s federal loan bonds (OFZ) and with an indicative placement volume of 20 billion roubles.

During the book building phase, bids were received from a wide range of investors, including pension funds, insurance and management companies, as well as banks.

As a result, demand was well above the initially indicated placement level, which led to a threefold revision of the initial rate guidance and an increase in the placement volume from 20 billion to 100 billion roubles.

The book was finally closed at 100 billion roubles at 7.25%, which was 1.65% above the OFZ.

The transaction became the largest placement of rouble bonds on the local capital market in the history of Russian Railways and the largest green placement among Russian companies.

Prior to the pre-marketing procedure, the issue was recognised by the Expert RA agency as complying with the Green Bond Principles of the International Capital Markets Association and the Russian national methodology developed under the guidance of VEB.RF.

Russian Railways will use the proceeds to finance its green projects.

The issue was organised by VTB Capital, Credit bank of Moscow, Russian Agricultural Bank, Sberbank CIB and Sovcombank. The settlement agent is VTB Capital.

Analytics on topic
Report
24.04.2024
Report
24.04.2024
Red Sea crisis: Impact on maritime and overland cargo traffic

The Red Sea crisis was a new challenge for maritime shipping, which begs the question of whether the maritime shipping market will be able to adapt to new circumstances or whether the unstable situation in the Red Sea will push shippers to switch to rail transport.

Article
30.10.2024
Between Scylla and Charybdis: The Fate of the Trans-Kyrgyz Railway

The Chinese-Kyrgyz-Uzbek railway affects the interests of key geopolitical actors of the Eurasian continent

Source: Valdai Discussion Club