The Board of Directors of JSC Rosseti, which had a meeting on March 31, 2015, considered a Eurobond issue project. It was decided to register a termless multi-currency programme of credit notes issue. Credit notes can be denominated in various currencies, including in Russian roubles, Chinese yuans and Singapore dollars, in the amount equivalent to 60 bn roubles.
The listing of Eurobonds is planned to be carried out at Irish (ISE) and Hong Kong (HKSE) stock exchanges.
The solution also provides the ability to enter into transactions with derivative financial instruments (hedging), aimed at the reduction of currency risks arising when obtaining a loan in a foreign currency.
The Decision of the Board of Directors on preparation of the Eurobonds Programme provides JSC Rosseti with a full range of financial instruments for borrowing in the domestic and the international capital markets. JSC Rosseti has already got bond issues (in the amount of 100 bn roubles) approved for placement on the Moscow Stock Exchange; operating subsidiaries have also got registered issues of bonds, the Eurobonds Programme and credit lines from leading banks of the country. Issuers of Rosseti Group of Companies are historically well-represented in the capital markets.
"From time to time the biggest companies of the country use the possibilities of international capital markets for borrowings under the most attractive terms. The capacity of the international market is complementary to the capacity of domestic bond and credit markets, and in terms of possible placement volume it exceeds the domestic market several times. For JSC Rosseti the access to the global capital market, above all, is lack of dependence on circumstances in the internal market, including access to financing in difficult and crisis times. In light of recent developments related to possibilities of leading Russian companies to borrow funds in US and European jurisdictions, the access to Asian markets is particularly interesting to us, and the approved Eurobonds Programme, among other things, will provide us such access. The decisions made will also allow JSC Rosseti to minimize foreign exchange risks in connection with loans in foreign currencies, through the utilization of hedging instruments generally accepted in such cases," says the Deputy Director General for Finance of JSC Rosseti, Yegor Prokhorov, commenting on the decision of the Board of Directors.
Borrowings under the Eurobonds Programme will be used to meet the overall needs of Rosseti Group of Companies in borrowing, within the borrowings volume approved according to an established manner, provided that the attraction of capital from the international markets is appropriate from financial and economic points of view.