Wednesday, January 26, 2011

Bank of Moscow Singapore bonds to yield 4.375%

Russia's Bank of Moscow set yield guidance at around 4.375% for an upcoming two-year bond denominated in Singapore dollars to raise as much as 200 million dollars. ING and UBS as joint bookrunners and joint lead managers for the issue.

In comparison to some of the earlier bonds sold in Singapore, Singapore’s CapitaMalls Asia, a unit of Southeast Asia’s biggest developer, sold 125 million dollars of debt due 2014 on Jan 21 with a coupon rate of 2.15%. Standard Chartered Plc's 220 million dollars of bonds maturing 2013 had a coupon rate of 2.22% when sold in July.

This bond issue looks rather attractive given its higher interest yield in a shorter maturity period. According to a report from the Wall Street Journal, Moody's Investors Service had cut BOM's debt from Baa2 to Baa3, the lowest within investment grade quality. It also tagged a negative outlook, citing the ongoing sale of Moscow's stake in the bank. Another credit rating company Fitch said it expects to assign a BBB- rating on the new notes, with a "rating watch negative" tag. In September, Fitch had placed Bank of Moscow's long-term ratings on a negative watch, citing a "risk of deterioration in the relationship between the bank and its majority owner, the City of Moscow (State). State ownership of a financial institution is often regarded as a positive factor for bondholders, given a higher likelihood of government support in the event of financial problems.

Bank Of Moscow Tapping Singapore Debt Market Amid Downgrade [via]

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