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Moscow, 10 April 2019 – ALROSA, the world leader in diamond mining, has announced the completion of its placement of U.S.$500m Eurobond issue maturing in 5 years. The notes were issued by ALROSA Finance S.A. and guaranteed by PJSC “ALROSA”. Books closed on 2 April and the coupon rate was set at 4.65% per annum.
The final book was five times oversubscribed. Investors from the UK bought 29% of the issuance, from continental Europe – 19%, from Russia – 18%, from the US – 17%, from Switzerland – 11% and 6% of the issuance – from the RoW. The notes were rated at the investment grade of BBB- by Fitch and a BBB- by S&P.
Commenting on the results of the placement, ALROSA CEO Sergey Ivanov said, “The interest in the issuance of the ALROSA Eurobonds exceeded our expectations and the coupon rate turned out to be the best among all corporate issuers in Russia since January 2018. This is testament to the fact that foreign and Russian investors not only view ALROSA as a high-quality, reliable lender with a stable and effective business model, and a transparent finance strategy, but also as a global company – an international leader in its field”.
The proceeds from the placement will be used to redeem part of ALROSA Group’s outstanding notes, as well as for general corporate purposes, including refinancing part of the existing banking debt. At the same time as placing the new issue, ALROSA announced a tender offer to partially redeem its outstanding notes due 2020 (7.75% per annum coupon rate) for an aggregate principal amount of up to U.S.$400 million with the redemption rate set at 106.75% of par value. Following settlement of the tender offer, the outstanding principal amount of the ten-year issue of the notes which remains due in November 2020, will be reduced to U.S.$494m. The results of the refinancing show that ALROSA has managed to reduce its debt capital costs and almost double the average maturity of its credit and loan portfolio.
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