Russia's MegaFon sets coupon for RUB 20 billion bond issue at 8%

By Toni Weeks

San Luis Obispo, Calif., March 7 - OJSC MegaFon subsidiary MegaFon Finance LLC said that the interest rate for its offering of RUB 20 billion of bonds has been set at 8%, according to a press release.

The company announced plans on Tuesday to place RUB 10 billion of bonds from each of its series 06 and series 07. According to the release, the transaction attracted substantial interest from investors, which allowed the company to set the coupon rate at the lower end of the 8% to 8¼% initial guidance. The coupon was determined via a bookbuilding exercise.

The submission of offers began March 5 and ended at 1 p.m. ET on March 6, with settlement to occur on March 13.

The bonds are putable after five years. In addition, the coupon will be subject to revision after five years.

The bonds, which will mature in 3,640 days, are guaranteed by MegaFon.

Raiffeisenbank, Sberbank CIB, VTB Capital are acting as lead managers. Sberbank is also the placement agent.

Proceeds will be used for general corporate purposes, including refinancing of current debt.

The bonds are expected to be admitted to trading on Micex in the unlisted securities section.

MegaFon is a Moscow-based universal telecommunications operator.

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