Russia's Vneshtorgbank to sell €500 million maximum 10-year notes via Deutsche Bank

By Paul A. Harris

St. Louis, Feb. 6 - Russia's VTB Capital SA (JSC Vneshtorgbank) plans to place a €500 million maximum offering of 10-year eurobonds (A2/BBB), according to a market source.

Deutsche Bank Securities has the books for the Regulation S offering.

Initial guidance comes as a spread of 90 to 95 basis points to the 10-year euro mid-swap rate, or approximately the 4.53% to 4.58% area, the source added.

The source, specifying that the offering represents VTB's debut issuance of euro-denominated bonds, said that Russian quasi-sovereign euro-denominated pricing references include OAO Gazprom's (Baa1/BB+) euro-denominated 4.56% notes due 2012, offered at 4.62%, or swaps plus 112 basis points, as well as Gazprom's 5 7/8% notes due 2015 offered at 4.88%, or swaps plus 124 basis points.

VTB is 99.9%-owned by the Russian state through the Federal Property Agency. VTB Group, of which VTB is the parent company and main entity, owns several other banks in Russia, as well as banks in Armenia, Austria, Cyprus, Georgia, Switzerland and Ukraine. The group offers banking services predominantly to Russian corporate, SME and retail clients, and has more than 200 outlets across the country.

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