UPDATE3: Source: Russia sets final guidance for 2 Eurobond issues

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MOSCOW/GORKI, Moscow Region, Mar 16 (PRIME) -- The Finance Ministry has set the final yield guidance for a new U.S. dollar-denominated 2029 Eurobond at 4.625% and for an additional issue of a 2047 Eurobond at 5.2-5.3%, a banking source told PRIME on Friday.

Demand for both issues amounted to $7.2 billion, the source said.

The yield guidance for the 2029 bonds was at first set at 4.75% and then reduced to 4.625-4.75%. The guidance for the 2047 bonds was cut from the initial 5.5% to 5.25-5.375% during book building.

The 2029 bond envisages an option to change the payment currency to rubles, British pounds, Swiss francs or euros before each payment, which increases its attractiveness for domestic buyers who use the bonds for repatriation of capital.

First Deputy Prime Minister Igor Shuvalov said that both Russian and foreign investors are interested in the bonds.

“This is a sophisticated issue with options for those who want to repatriate their capital, and additional borrowings to service budget needs. Yesterday we had $4 billion of bids from both Russian and foreign investors,” he said.

The funds will be used for the government’s general purposes and for a swap program for 2030 Eurobonds.

The ministry said earlier in March it will swap no more than U.S. $4 billion worth of sovereign Eurobonds that mature in 2030 for Eurobonds maturing in 2027 or 2047 or for new issues of Eurobonds. VTB Capital collected bids for the swap from March 7 through Thursday.

The source said that $7.659 billion worth of 2030 bonds were submitted for the swap at par, of which $5.79 billion was accepted. Bonds with a $1,000 value will be bought back at $536 apiece.

The price for bonds eligible to the swap operation, indicated in the bids, should not exceed 113.5% of the par amortization included. All bids will be satisfied on Friday at a unified price set by the ministry after analyzing the bid book. Prices for newly offered bonds will also be set on Friday.

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