MTS Completes Book Building for RUB 13.5 bn Exchange-Traded Bonds

MTS, a leading telecommunications company, concluded the book building for a significant placement of exchange-traded bonds, signaling robust investor interest and confidence in the company’s financial stability. The five-year issue, labeled as the 002P-02 series, reached a substantial amount of RUB 13.5 billion, surpassing the initially announced RUB 10 billion.
MTS 4G RussiaThe bonds, featuring a floating coupon rate pegged to RUONIA with an enticing spread of 1.25 percent per annum, attracted considerable attention during the book building process. Notably, this placement marks an extension from the previously offered four-year term to a more extended five-year period, reflecting market demand and investor preference for MTS’s floating-rate bonds.

Alexander Smirnov, Director of MTS’s Corporate Finance and Treasury Department, expressed satisfaction with the overwhelming investor response, stating, “Our decision to place a second issue of floating-rate bonds was driven by the high level of demand that we saw from investors during the placement of a four-year issue several weeks ago.”

The book build, conducted on November 14, 2023, witnessed a downward adjustment in the benchmark spread from an initial 1.40 percent to the final 1.25 percent over RUONIA, affirming investor confidence and enthusiasm for MTS’s bond offering.

These bonds, with a face value of RUB 1,000 and a coupon period of 91 days, have been listed on Moscow Exchange’s Level 1 quotation list, further enhancing their accessibility and visibility in the market.

The issuance received commendable support from reputable financial entities, including BK Region, Gazprombank, Sinara Investment Bank, and Rosselkhozbank, who acted as lead managers for the placement. Additionally, BK Region served as the placement agent for this notable issuance.

The raised capital of RUB 13.5 billion will be channeled towards refinancing MTS’s existing debt obligations and supporting the company’s general corporate initiatives, consolidating its financial position and reinforcing its growth trajectory.

Both Expert RA and NCR are anticipated to assign credit ratings for these securities, reflecting the strong market confidence in MTS’s creditworthiness.

The provisional placement date for these bonds is scheduled for November 22, 2023, marking another milestone in MTS’s successful financial endeavors.