FESCO rouble bonds more than 2.5 times oversubscribed

04 June 2013
On May 30, 2013, Far-Eastern Shipping Company plc (Company, FESCO) successfully priced three-year Russian rouble denominated exchange-traded, non-convertible bonds for a total amount of RUR 5 bln.

During the pre-marketing, investors expressed high interest in the Company bonds. As a result, FESCO extended the offering volume from RUB 3 bln to RUB 5 bln. Bookrunners received orders from different groups of investors; more than 60 accounts participated in the placement and total demand exceeded RUB 12.8 bln.

At the date of book closing, the guidance was revised to 10.25%-10.50% (from initial level of 10.50–11.00% p.a.). The deal was priced at the lower end of the new guidance with more than 2-times oversubscription. The final coupon rate amounted to 10.25% p.a. for the period to maturity.

The bonds have a call option in 1.5 years from the placement date at a price of 102.00% from the nominal value.

The placement of Series BO-02 bonds takes place on MICEX on June 4, 2013.

Yury Gilts, FESCO President and CEO commented:

The high demand for the bonds and increased offering volume confirmed the high level of investors’ confidence in FESCO Group and its strategy on the transportation market. The proceeds from the rouble bonds placement will be used only for the refinancing of the exciting debt, and will not increase the total debt of the Group. The positive effect of the rouble bonds placement includes optimization of capital structure as well as improvements in foreign currency mix.

The transaction was led by VTB Capital, Otkrytie Bank/NOMOS-BANK, Raiffeisen Bank. Placement agent — Raiffeisen Bank

Co-arrangers — EFG Asset Management, Veles, UK Ingosstrakh Investments, UK Capital

Managers — Asia-Pacific Bank, Pervobank, FC Uralsib, Promsvyazbank, UK Trinfiko, SK Ingosstrakh.

Co-managers — KB FDB, NBD-Bank, Vostochny Express Bank

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FESCO is one of the largest Russian port owners and operators with integrated rail and logistics businesses and primarily focused on intermodal deliveries of containerized cargo. The Group owns port, rail and shipping assets, which allow it to provide door-to-door logistics solutions and control almost all steps of the intermodal transportation value chain.

The majority of FESCO’s operations are located in the Russian Far East and the Group benefits from growing trade volumes between Russia and Asian countries.

FESCO controls the Commercial Port of Vladivostok, which has throughput capacity of 3.9 million tons for general cargo and oil products, 150,000 vehicles and over 600,000 TEUs in containers. FESCO is one of Russia’s top 10 private railcar operators providing services under the Transgarant (100%) and Russkaya Troika (50% JV with Russian Railways) brands. The Group owns a fleet of vessels mostly deployed through own line and logistics operations. In 2012, consolidated revenue of FESCO Group reached USD 1,197 million.