ChelPipe Group Goes Through with First Eurobond Issue

23 September 2019 (09:13)

UrBC, Chelyabinsk, September 23, 2019. Chelyabinsk Pipe Rolling Plant (ChelPipe) went through with its first Eurobond issue (total amount: $300m); the coupon yield is expected at 4.5% a year; the bonds are to be redeemed in 2024.

According to ChelPipe Group’s press service, the company’s good credit history and propitious market situation both attracted a wide range of investors during the five-day road show in Moscow, Zurich, Frankfurt, New York, and London. The initial coupon yield was set within the 4.75%-5% range and, as over $1bn got offered in the course of the book-building process, the interest rate had been reduced twice and the deal was closed at 4.5% a year.

There are 100 final names in the book now, including investors from Great Britain (30%), Russia (28%), continental Europe (23%), Asia (14%), and the United States (5%). Some 52% of the bond issue got purchased by asset management companies, funds, and insurance companies; 48% of the issue went to banks and customer in the private banking sector.

Citi, Gazprombank, J.P. Morgan, and Société Générale acted as the issue coordinators and book runners; Renaissance and Sovcombank acted as the book runner and co-manager of the issue, respectively. The guaranteed bonds (total amount: $300m; coupon yield: 4.5% a year; maturity date: September 2024) got issued by Chelpipe Finance DAC (registered in Ireland and set up specifically to provide financing mechanisms for ChelPipe Group’s debts).

The Group intends to direct the money to early repayment of ruble loans in order to improve its debt structure.

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