OAO Sberbank (SBER)’s sale of 550 million Turkish lira ($304 million) bonds is part of its strategy for the parent company to seek financing in international markets, according to Chris Jones, global head of local currency syndicate at HSBC Holdings Plc. (HSBA)
Sberbank, Russia’s largest lender, sold the five-year lira notes with a 7.4 percent yield yesterday, with HSBC, JPMorgan Chase & Co. and Sberbank CIB acting as joint lead underwriters. The issue will help fund Istanbul-based Denizbank AS (DENIZ)’s loan book, Jones said in a telephone interview from London today. Sberbank is rated Baa1 by Moody’s Investors Service, two steps above Denizbank, which it bought last year for $3.53 billion.
“They want to give a consistent message to the market with this sale,” Jones said. “Originally, their Turkish unit Deniz was considered as the issuer, but it made more sense in terms of the price to issue out of the higher-rated parent.” Jones said in a telephone interview from London today.
About 40 percent of the demand for the Sberbank bonds came from the U.K., 26 percent from Germany, Austria and Switzerland and 11 percent from Asia, Jones said.
The issue comes as Turkiye Garanti Bankasi AS (GARAN), Turkey’s largest bank by market value, hired BNP Paribas SA, Deutsche Bank AG, Goldman Sachs Group Inc., Mitsubishi UFJ Securities and Standard Chartered Plc to sell its first lira-denominated bonds, according to a banker who asks not to be named because the information isn’t yet public.
Turkey’s Akbank TAS (AKBNK), part-owned by Citigroup Inc., sold one billion liras of five-year bonds at 7.5 percent yield on Jan. 31, in the first sale of lira debt overseas by a Turkish bank.
“The Sberbank issue shows the trend of cross-market emerging-market financing,” HSBC’s Jones said. “A Russian bank borrowing in liras was something you would not imagine a few years ago.” VTB Group, Russia’s second-largest bank, sold its second lira bond this month, issuing 300 million lira of two- year debt.
Sberbank’s lira-bond offering combined the bank’s credit quality as an international group with its position in Turkey, Vlada Gosal, managing director for debt and capital markets at Sberbank CIB, said today in an e-mailed statement.
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