Investors buy $2 bln in Gazprom Eurobond, shrugging off Nord Stream 2 sanctions
GAZPROM-EUROBOND/ (UPDATE 2) UPDATE 2-Investors buy $2 bln in Gazprom Eurobond, shrugging off Nord Stream 2 sanctions
MOSCOW, – Russian gas giant Gazprom is placing 8-year Eurobond worth $2 billion, Interfax news agency said on Wednesday, amid strong demand, an indicator that investors saw limited risk from sanctions pressure on the Nord Stream 2 project.
Gazprom, which is leading the $11-billion gas pipeline project from Russia to Germany, has been out on the market for a U.S. dollar Eurobond issue of a benchmark size, or no less than $500 million.
According to the source, the yield is set at 2.95 per cent.
The yield guidance was later narrowed to around 3.125 per cent and further to 2.9 per cent-2.95 per cent as demand for the upcoming issue exceeded $3.75 billion during the book building, a financial market source told Reuters.
In the Eurobond prospectus seen by Reuters on Tuesday, Gazprom has warned of the risks that the Nord Stream 2 gas pipeline project may be suspended or scrapped amid political pressure.
The United States this week sanctioned one of the Russian vessels destined to finish the pipe-laying works under the sea, earlier having warned of more sanctions to come.
“The imposition of any additional sanctions is negative for company sentiment at this stage, but in our baseline scenario we anticipate that the project will be completed,” Aton brokerage said in a note on Wednesday.
Overall, external markets are favoring Russian assets amid rising oil prices, on Tuesday allowing Sovcombank, one of the country’s top private banks, to raise $300 million at a 3.4 per cent yield via the 4-year Eurobond and demand at over $700 million.
Moscow’s Domodedovo, which owns and runs the second largest airport in Eastern Europe by traffic, is also out to the market this week with 7-year U.S. dollar Eurobond, with funds to be used to buy some of its outstanding notes due in 2021 and 2023.
Gazprom last tapped the market in October, raising $1.4 billion in perpetual bonds at a yield of 4.6 per cent and another 1 billion euros at 3.9 per cent. It plans to raise a total of 512 billion roubles ($7 billion) both in Russia and abroad this year.