MTS Completes Book Build for Series 001R-22 MTS Exchange-Traded Bonds and Series 001R-02 MTS Bank Exchange-Traded Bonds
MOSCOW, Russia – Mobile TeleSystems Public Joint Stock Company (“MTS” or “the Company”) (NYSE:MBT; MOEX: MTSS), Russia’s largest mobile operator and a leading provider of media and digital services, announces the successful completion of the book build for its RUB 20 billion series 001P-22 exchange-traded bonds with a maturity of two years and a coupon rate of 8.30% per annum – the lowest rate among all public placements on the Russian local market in 2022 – and RUB 7 billion series 001P-02 exchange-traded bonds for MTS Bank with a maturity of three years and a coupon rate of 9.55% per annum.
The MTS 001P-22 bonds are part of exchange-traded bonds program No. 4-04715-A-001P-02E of July 27, 2016. The nominal price of the bonds is RUB 1,000, and the coupon period is 91 days.
The MTS Bank 001P-02 bonds are part of exchange-traded bonds program No. 4-02268-B-001P-02E of April 9, 2021. The nominal price of the bonds is RUB 1,000, and the coupon period is 91 days.
The book building for both issues took place on July 29, 2022, with about 70 orders received from a wide range of investors, including banks; investment, asset management and insurance companies; private pension funds; and retail investors. Owing to the high degree of interest, the bid book for the MTS bonds was 3.5 times oversubscribed, and the bid book for the MTS Bank bonds was nearly three times oversubscribed. The robust demand for both issues made it possible to lower the coupon rate several times and to close the books at the lower end of the final range, at 8.30% and 9.55% per annum, respectively, and to more than double the initially declared value of the placements, from RUB 10 billion to RUB 20 billion and from RUB 3 billion to RUB 7 billion, respectively.
“This is the first time that the Russian market has seen the simultaneous placement of bonds from two issuers that are full-fledged participants of the same ecosystem (MTS and MTS Bank), where the companies formally operate in different economic sectors but, from the point of view of doing business and their development strategies, are inextricably linked to each other. For us, MTS Bank is not just a bank; it’s also an essential element of the huge MTS ecosystem; it offers a range of products that are complementary to most MTS products and that are deeply embedded in the Group’s existing ecosystem. The faith in the creditworthiness of both the Company and the Bank that investors demonstrated during the dual placement enables the Group to obtain financing at very low rates, and also to further reduce the credit spread between the borrowing levels of MTS and MTS Bank, which is logical considering the associated credit risk,” said Alexander Smirnov, Corporate Finance and Treasury Department Director at MTS.
“The value of the placements and the final price parameters of the issues once again showed the high level of interest on the part of investors both in MTS Group in general and in MTS Bank in particular. Since the Bank’s successful debut issue of ruble bonds last year, we have continued to offer investors debt instruments that enjoy robust demand. Investors were able to purchase the issued bonds both through the lead managers and through our MTS Investments mobile application,” said Gleb Sorokin, Vice President and Head of the Investment Division at MTS Bank.
The lead managers of both issues were Bank GPB (JSC), LOCKO-Bank (JSC), Credit Bank of Moscow (PJSC), Rosbank PJSC, Solid IF JSC and BCS Global Markets; the placement agent was Bank GPB (JSC). The technical placement of the issues will take place on the Moscow Exchange on August 5, 2022. The funds raised will be used for debt refinancing and for general corporate purposes.