January 24, 2008 |
|VTB, Russia's second-largest bank, plans to place over $1 billion in Eurobonds during the first quarter of 2008, a senior bank executive said on Wednesday.|
Nikolai Tsekhomsky, the state-controlled bank's financial director, did not give a precise date for the placement. "The market is unpredictable now, and it is difficult to talk about a date. We need to see investor demand," he said.
The Eurobond issue is planned as part of the bank's unprecedented $20 billion foreign borrowing program. In November, VTB floated Eurobonds totaling $2 billion. The bank said it would use the funds raised to finance consumer loans.
The Eurobonds will have a term to maturity of about five years.
"The volume of the issue could be amended. We could also change the issue timeframe and the Eurobonds' maturity," he said, adding the borrowing program could also be increased if necessary.
Tsekhomsky said VTB considered U.S. pension funds to be the most attractive investors, with their extensive reserves.
He also said receipts from the sale of a 5% stake in the European Aeronautic Defense and Space Company (EADS), acquired in 2006 for about $1 billion, would be used to finance retail credit. VTB sold the stake in EADS for about the same sum to another state bank, Vnesheconombank (VEB), at the end of last year.
Experts suggested the bank had resorted to borrowings in response to accusations that it has cut the volume of consumer loans and raised its rates considerably. Additional funds would allow the bank to step up crediting of Russian companies, they suggested.
VTB President Andrei Kostin told Kommersant daily in August that the bank could finance two major deals on the mergers and acquisitions market, including the Russian diamond monopoly Alrosa's planned acquisition of Polyus Zoloto gold producer, a deal estimated at more than $2 billion.
|Full company name||Bank VTB (PJSC)|
|Country of risk||Russia|
|Country of registration||Russia|