STLC placed a new USD 550 million Eurobond issue

02.10.2019

State Transport Leasing Company (STLC) placed a new USD 550 million Regulation S Eurobond issue on Euronext Dublin stock exchange. The coupon rate was fixed at 4.949 per cent, the minimal rate ever achieved by the company. The issue has bullet repayment at par value on the maturity date, 18 February 2026. Thus, the tenor of the issue is approximately 6.5 years.

The new Eurobond issue generated strong demand from institutional investors. Almost 65 per cent of the offering were purchased by international investors, including those from Europe (36 per cent allocation), US offshore investors (20 per cent). Investors from Asia and MENA bought 9 per cent of the issue. The share of the Russian investors in final allocation amounted to 35 per cent.

Gazprombank, J.P.Morgan, Renaissance Capital and VTB Capital were mandated to act as the Joint Lead Managers and Bookrunners for the issue. The issuer of the notes is GTLK Europe Capital DAC, a 100 per cent subsidiary of GTLK Europe DAC. The notes are guaranteed by STLC (Ba1/BB/BB+) and GTLK Europe DAC.

The proceeds will be used for the general corporate purposes, including refinancing of existing financial indebtedness denominated in USD.

The issue was assigned 'BB+' rating by Fitch Ratings and 'Ba2' rating by Moody’s Investors Service.

“STLC has successfully returned to the Eurobond market after the previous placement in April. Since that time two rating agencies – S&P and Fitch – upgraded our long-term credit ratings to ‘BB’ and ‘BB+’ respectively. On the back of these positive movements and overall favorable market conditions we managed to place the largest Eurobond issue in the Company’s history with the lowest coupon rate ever of 4.949 per cent. Decrease in the coupon rate compared to the placement in April exceeded 100 basis points! The new issue attracted demand from a wide range of international investors. We were happy to allocate a significant share of 20 per cent of the offering to US offshore investors, which is not typical for Reg S only deals, as well as 9 per cent of the issue to investors from Asia and MENA – two strategic regions where STLC Group operates. We’ll continue to develop our international leasing platform GTLK Global Business and work on further widening of investor base and diversification of funding sources,” comments STLC’s CEO Sergey Khramagin.

As at the time of placement of a new Eurobond issue STLC Group had three Eurobond issues for the total nominal value of USD 1.5 billion outstanding, the most recent of which was printed in April 2019.

STLC currently holds ‘Ba1’ long-term corporate family rating (outlook ‘stable’) from Moody’s Investors Service, ‘BB+’ long-term issuer default rating (outlook ‘stable’) from Fitch Ratings, and ‘BB’ long-term credit rating (outlook ‘stable’) from S&P Global Ratings.