Bond investors flock to Gazprom
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Bond investors flock to Gazprom

Russia?s gas monopoly Gazprom has increased its debt issue to $1.25 billion after being swamped with demand for the country?s first investment grade bond. The company sold an extra $250 million after it received $6 billion in investor demand for the bonds, which are also the first securitized notes to be issued out of Russia.

This is despite corporate uncertainty in Russia surrounding the prosecution of oil giant Yukos and a depressed market for Russian debt caused by Germany?s recent sale of bilateral Russian bonds.

Gazprom also took the decision to price its issue generously, selling it at about 10 basis points above Russian sovereign bonds despite being rated BBB- by Standard & Poor?s, one notch better than the Russian government.

Commentators put Gazprom?s success down to this generous pricing and to the issue?s unprecedented credit rating, which allowed the company to tap a wider pool of investors.

The deal was lead-managed by ABN Amro, Merrill Lynch and Morgan Stanley.

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