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Euromoney’s borrower awards 2007 |
| Overall awards | |
| Best sovereign/supranational/agency borrower | Best bank borrower |
| Best insurance borrower | Best ABS |
| Best CDO borrower | Best covered bond issuer |
| Best corporate borrower | Best high-yield/leveraged finance borrower |
| Latin America regional awards | |
| Best sovereign borrower | Best corporate borrower |
| Best financial borrower | |
| Central & Eastern Europe regional awards | |
| Best sovereign borrower | Best corporate borrower |
| Best financial borrower | |
| Asia regional awards | |
| Best sovereign borrower | Best corporate borrower |
| Best financial borrower | |
| Middle East and northern Africa regional awards | |
| Best borrower | |
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“Hats off to RAB – since its debut Eurobond issue in 2005 it has gone on to become a very innovative borrower” |
State-owned banks in Russia are not renowned for their financial acumen when it comes to approaching the capital markets. However, Russian Agricultural Bank is proving an exception, with its market-savvy approach paying dividends at home and abroad. In double-quick time the bank has established a reputation as a trailblazer in the international bond markets, winning widespread acclaim in the process. “Hats off to RAB – since its debut Eurobond issue in 2005 it has gone on to become a very innovative borrower and has really upped its game in terms of its appeal to investors and the sophistication of its issuance strategy,” says Reid Payne, managing director, debt capital markets, at ABN Amro in London.
Commenting on the bank’s approach to raising debt, Victoria Karinia, head of RAB’s international operations, says that as the prime lender to the agricultural sector in Russia it is important that the bank supplies its borrowers with ample and cost-effective funding.
In the past year the bank has sought to ring the changes with each of its transactions. In September last year, for example, it addressed fears about a possible clampdown by the Bank of Russia on callable structures for subordinated debt with a novel $500 million 10-year non-call five lower tier 2 capital issue that featured a call option that is conditional on the Russian central bank revising the regulations governing subordinated issuance. Thanks to this innovation, the transaction attracted $1.3 billion of orders and was priced at 175 basis points over mid-swaps – well inside original price talk of 180bp to 190bp over. “The deal structure employed by RAB has formed the precedent for future deals and resolved some structuring and regulatory issues within Russia,” says Andrew Dell, global head of emerging market debt finance and syndicate at HSBC.
And in March RAB wowed investors in the hyper-conservative Swiss franc market with a Sfr375 million ($306 million) three-year deal via Dresdner Kleinwort and UBS, which was almost double the initially mooted Sfr200 million targeted amount and marked the first Swiss franc issue by a Russian borrower since before the 1917 Bolshevik Revolution. Not only was the issue much larger than planned, at 95bp over mid-swaps it was priced well inside the initial price guidance of 100bp over. In May the bank enjoyed a similarly warm reception in the dollar markets with a $1.25 billion 10-year issue, which attracted $2.2 billion of orders.
RAB has not neglected Russian investors and has Rb20 billion ($774.6 million) of rouble bonds in issue. Stanislav Ponomarenko, credit analyst at ING in Russia, says that the bank’s bonds have proved popular as they are widely seen as quasi-sovereign risk, but offer a yield pick-up to state debt.
It’s not only in the bond markets that RAB has tasted success. In April, the bank’s maiden foray into the international syndicated loan market proved a roaring success, with mandated lead arrangers ABN Amro and Deutsche Bank closing the book on a two-tranche facility at $520 million, well above the $300 million initially targeted by the borrower.
