On June 07, 2006, a placement was made of a debut issue of BELON-Finance bonds worth RUR1.5 billion.
The bonds were placed on the MICEX trading platform through an open subscription with a tender for the first coupon rate.
There were 57 bids by investors, with the total volume reaching RUR3,254 million. First coupon rate was offered by investors in the range of 8.75% to 9.50% p.a., with most of the bids being within 9.0% to 9.2% p.a.
The first coupon rate as set by the Issuer amounted to 9.10 % p.a. (which is RUR45.38 per a bond); the rates of the second to sixth coupons are equal to the first coupon rate.
Effective yield of the bonds to redemption was 9.31% p.a., which is closer to the bottom line estimated by the arrangers before the placement. Such success resulted from a favorable market environment, impressive membership of the syndication and high credit quality of BELON-Finance.
The whole issue was fully placed in the morning of the commencement day.
Vneshtorgbank is lead manager and underwriter of the bond issue.
Among co-underwriters are ING BANK (EURASIA), Raiffeisenbank Austria, AK BARS BANK, Bank of Moscow, Evrofinance Mosnarbank, IMPEXBANK, Kapital IG, International Moscow Bank, SOYUZ Bank, and TRUST Investment Bank. The payment agent and a depository for the issue is the National Depository Center.
The nominal volume of BELON-Finance bond issue is RUR1.5 billion (State Registration Number is 4-01-36138-R as of 11.04.2006). The bonds are secured by a guarantee of JSC BELON. The issue matures in 3 years (or 1,092 days) and has semi-annual coupon payment.
BELON-Finance, a limited liability company, was established on February 6, 2006 as a 100%-owned subsidiary of JSC Belon with the view of raising funds for Belon Group on financial markets.
Belon Group is a major Russian producer of coal products, working stock and innovative facilities. Its core business activities are Coal, Metal, Construction Materials and Innovative products. Structurally, Belon Group is a holding with JSC Belon being a core profit center.
In 2000-2005, average annual profit of JSC Belon grew more than 31%, and in 2005 the profit gained reached RUR13.35 billion, under the Russian Accounting Standards, which is 17% higher than the level posted for the year 2004. Operating profit gained by JSC Belon in 2005 grew 35% and amounted to RUR2.04 billion; its net profit grew 38% to RUR1.33 billion.