Moscow Exchange lists ruble structured bonds under Russian law

MOSCOW, Nov 14 (PRIME) -- Investment company BCS Capital is the organizer of a debut issue of ruble-denominated structured bonds with 85% capital protection offered to qualified investors on the Moscow Exchange under the Russian law, BCS Capital CEO Edvard Golosov and Managing Director for structured products Franz Hep told reporters on Thursday.

“We have chosen only Russian issuers, but we have not made a ‘Russia-style’ product. We added (IT giant) Yandex, which has high liquidity and is listed on the offshore stock exchanges, we added (oil company) Lukoil… Today we have a debut offering… (the bonds) will be available in around a week,” Golosov said.

“This is a pilot project for us… We have made various products, the central bank registered four issues … The 01 and 02 series are being processed, they will be introduced later.”

The Moscow Exchange and BCS Capital said in a joint statement that 3-year structured bonds of the 03 and the 04 series have been included into the bourse’s third-level listing. The volume of each issue is 600 billion rubles. The placement price is at par. The issues carry an early redemption option and an additional income option. The bonds are offered only to qualified investors.

The 03 series bonds base on the shares and global depositary receipts (GDRs) of Russia’s largest issuers, including gas giant Gazprom, Lukoil, metals company Norilsk Nickel, top bank Sberbank and Yandex. The securities have a threshold of 80% and an interest rate of 16% annually in rubles, which will be paid every six months.

“This is a 3-year product featuring capital protection. The protection is not 100%, but 85%, the threshold is set at 80%. It means that if the basis asset closes above 80% in three years, (the investor) gets back 100% of capital… If the assetfalls over 20%... then the investor gets 85% of capital, the risk ratio is 15% of the investment,” Hep said.

(64.2009 rubles – U.S. $1)

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