VTB Group has launched a new product platform in the Russian debt market. The first instrument issued as part of this platform are ruble bonds under Russian law totaling 5bn rubles with a fixed coupon rate of 0.1% with an additional income linked to the growth of MICEX. In accordance with the conditions of issue, the investors will receive more than 90% of the positive MICEX index growth from the time the bonds are issued. The issuer of the bonds is VTB Capital Finance, part of VTB Capital.
The bonds will be placed and traded on the MICEX-RTS exchange. As VTB Bank is acting as guarantor for all payments connected to the bonds, Moody’s has assigned them a rating of Baa1 (sf). This platform will make it possible in the future to create, in a short time frame, new instruments with capital protection as requested by the client, at the same time ensuring a guaranteed income in the form of a fixed coupon and the involvement of different types of assets in the rise in value.
Instruments issued on the basis of this platform will be attractive to not only institutional clients, but also private investors due to their convenient structure, ability to be linked to a wide range of basic assets (among them commodity groups, indices, interest rates, etc.) and their attractive cost.
Herbert Moos, Deputy President and Chairman of the Management Board of VTB Bank, said: “This is a significant step in strengthening our capabilities to offer our asset-side client access to a wide range of underlyings via a structure which has obvious advantages in terms of risk profile. This new instrument by VTB Group, previously only issued by foreign banks, takes the Russian market another step closer to international standards.”
Vitaly Bouzoveria, Head of Fixed Income Sales & Trading at VTB Capital, said: “VTB Capital is continuing to widen the range of its investment products and services as part of its business development strategy. The introduction of this unique product platform is an important component for diversifying the Russian capital market in general. We are sure that the innovative structure of these bonds will be very attractive to a wide range of Russian investors.”