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Alfa-Bank Successfully Closes Additional Issue of USD 300 mln Subordinated Perpetual Eurobonds Compliant with Basel III

December 22, 2016. TAG: Financial Services

On December 20, AO «Alfa-Bank» successfully closed the additional issue of USD 300 mln perpetual Eurobonds compliant with Basel III (Central Bank Regulations 395-P). The issue parameters correspond to the principal terms of the first public offering of Eurobonds by a Russian financial institution compliant with Basel III, which Alfa-Bank accomplished on November 3, 2016: the first call option is scheduled for February 3, 2022, with the initial coupon rate fixed at 8% per annum (quarterly payable). The total amount of the subordinated loan will stand at USD 700 mln (following approval by the Central Bank).

Alexei Tchoukhlov, Deputy Chairman and Chief Financial Officer, said:

«Alfa-Bank has been complying with the Central Bank’s capital adequacy requirements by a large margin. Given the successful closure of the perpetual subordinated issue in early November and the steadily growing quotations on the secondary market, we also believed that investors will demonstrate a substantial interest in the additional issue despite the beginning of the winter holiday season. The timeframe of a possible additional issue is rather strictly regulated, so it was important to close it before the end of 2016. We are happy with the offering outcome both in terms of value (the offering price reached 101% of the nominal value, which yields 7.762% per annum) and investors: a great deal of institutional investors from Europe, the UK, Switzerland, Asia and Russia joined the deal. The demand exceeded the supply by practically 1.5-fold. The fact that we closed this kind of deal in the season atypical of capital markets (late December) amid the absence of positive international news proves that investors keep a wary eye on Alfa-Bank’s activity and are ready to rapidly respond to offers of the quality issuer.»

The additional issue will be included in Alfa-Bank’s sources of additional capital following the Central Bank’s approval of the loan deal. The bonds were issued by Alfa Bond Issuance plc. Ireland). The issue was realized within its own LPN Program under RegS. It was organized by Alfa-Bank and UBS Limited.

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The information contained herein is not an offer, or an invitation to make offers, to sell, exchange or otherwise transfer securities in the Russian Federation or for the benefit of any Russian person or entity and does not constitute an advertisement or offering of securities in the Russian Federation. The information contained in this announcement is intended only for «qualified investors» within Russian legislation or to persons outside Russia. This announcement must not be distributed or circulated into the Russian Federation or made available in the Russian Federation, unless and to the extent permitted under Russian law.

The information contained herein is not for public release, publication or distribution, directly or indirectly, in or into the United States of America. The materials do not constitute an offer of, or solicitation to purchase or subscribe for, securities in the United States, nor may the securities be offered or sold in the United States, or to, or for the account or benefit of, U.S. persons (as such term is defined within Regulation S under the Securities Act of 1933 (the «Securities Act»)), absent registration or an exemption from the registration requirements of the Securities Act. No public offering of securities will be made in the United States of America. Copies of this announcement are not being made and may not be distributed or sent into the United States, Russia, Canada, Australia or Japan.

This announcement is directed only at persons who (i) are outside the United Kingdom or (ii) have professional experience in matters relating to investments falling within article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the «Order») or (iii) are persons falling within Article 49(2)(a) to (d) («high net worth companies, unincorporated associations, etc.») of the Order or (iv) to whom this announcement may otherwise be directed without contravention of section 21 of the Financial Services and Markets Act 2000 (all such persons together being referred to as «Relevant Persons»). This announcement must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this announcement relates is available only to Relevant Persons and will be engaged in only with Relevant Persons.

Some of the information in this press release may contain forward-looking statements regarding future events or the future financial performance of the Alfa Banking Group. You can identify forward-looking statements by terms such as «expect,» «believe,» «anticipate,» «estimate,» «intend,» «will,» «could,» «may» or «might,» or the negative of such terms or other similar expressions. These statements are only predictions and actual events or results may differ materially. The Alfa Banking Group does not intend to or undertake any obligation to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in forward-looking statements.

Founded in 1990, Alfa-Bank is one of the largest private banks in Russia, which offers a wide range of products and operates in all sectors of the financial market, including interbank, corporate and retail lending, deposits, payment and account services, foreign exchange operations, cash handling services, investment banking, and trade finance, as well as other ancillary services to corporate and retail customers.

Under International Accounting Standards (IAS), in the first half of 2016, the assets of Alfa Banking Group — which comprises ABH Financial, Alfa-Bank as well as subsidiary financial companies — totaled $33,3 bln, loan portfolio totaled $22.0 bin, total equity was $4.6 bln, with net profit for the first half of 2016 of $161 mln.

By June 30, 2016, Alfa-Bank serves over 277,000 corporate customers and 14 mln individuals. Alfa-Bank has 723 offices and branches in Moscow, Russia and abroad, including a subsidiary bank in the Netherlands, as well as financial subsidiaries in the United Kingdom, and Cyprus.

Alfa-Bank is an official European bank of the 2018 FIFA World Cup and the 2017 FIFA Confederations Cup. Since the moment it was established in 1990, the bank was known for its support to large-scale cultural events. World-famed musicians Ray Charles, Elton John, Tina Turner, Brian Adams, Eric Clapton, Sting, Robbie Williams, Whitney Houston, Paul McCartney, Mark Knopfler and many others visited Russia with Alfa-Bank;s assistance. In 2011 the bank organized a 4D show of internationally acknowledged David Atkins on Moscow’s Vorobyovy Hills visited by over 800 000 spectators. In addition, Alfa-Bank is the organizer of the annual modern music and technology festival Alfa Future People.

Alfa-Bank (Russia)

ABH Holdings S.A. (ABHH) is a privately owned Luxembourg-based investment holding company investing into several banking groups in the CIS and Europe. ABHH includes Alfa-Bank (Russia), Alfa-Bank (Ukraine), Alfa-Bank (Belarus), Alfa-Bank (Kazakhstan) and Amsterdam Trade Bank N.V.

Alfa-Bank (Russia), founded in 1990, has developed rapidly to become one of Russia's leading privately owned banks. It provides a full range of banking services — corporate banking, retail banking, investment banking, asset management and trade finance. In 2014, Alfa-Bank Russia had 804 branches.