Promsvyazbank tenders for $250 million of three series by Dutch auction

By Susanna Moon

Chicago, Feb. 4 – OJSC Promsvyazbank said that PSB Finance SA began modified Dutch auction tender offers for up to $250 million of three series of notes.

The minimum purchase price for each $1,000 principal amount will be as follows:

• $990 for the $189,052,000 of outstanding $200 million 11¼% loan participation notes due 2016 issued as series 4;

• $950 for the $400 million 8½% loan participation notes due 2017 issued as series 6; and

• $800 for the $484.54 million of outstanding $600 million 10.2% loan participation notes due 2019 issued as series 7.

The notes were issued for the purpose of financing a corresponding loan to Promsvyazbank.

Holders also will receive accrued interest.

The minimum denomination is $100,000 for the 11¼% notes and $200,000 for the other two series.

The purpose of the offers is to allow the borrower “to deem certain of its outstanding loans from the offeror to be prepaid, in an amount corresponding to the aggregate principal amount of notes purchased by the offeror pursuant to the offers, which is reflective of the borrower’s liquidity position and consistent with its ongoing liability management objectives,” according to a company press release.

“The borrower expects to redeem the amortized portion of its outstanding ‘old-style’ subordinated loans corresponding to the 2016 subordinated notes and the 2019 subordinated notes, save on coupon payments and improve the borrower’s tier 1 capital by recording retained earnings,” the release said.

The offers also provide holders an opportunity “to realize liquidity” on their notes that might not otherwise be available, the company noted.

Promsvyazbank said it will continue to look at opportunities to buy back debt based on factors such as its borrowing costs and the overall remaining tenor of its debt portfolio.

The offer will end at 11 a.m. ET on Feb. 11, with settlement occurring on Feb. 13.

J.P. Morgan Securities plc (+44 20 7134 2468, attn.: liability management, email: em_europe_lm@jpmorgan.com) and Societe Generale (+44 20 7676 7579, email: liability.management@sgcib.com, attn.: liability management) are the dealer managers.

The tender agent is Lucid Issuer Services Ltd. (+44 20 7704 0880, email: promsvyazbank@lucid-is.com, fax: +44 0 7067 9098, attn: Victor Parzyjagla).

Promsvyazbank is a Moscow-based lender.

© 2015 Prospect News.
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