Russia’s VTB Bank begins tender offers for seven series of notes

By Toni Weeks

San Luis Obispo, Calif., July 16 – Russia’s JSC VTB Bank began a tender offer for seven series of notes issued by VTB Capital SA, according to a company filing with the London Stock Exchange.

The purchase prices will be determined by a Dutch auction for three series of notes and fixed for four series of notes, as detailed below.

For the notes undergoing the Dutch auction procedure, the company will accept tenders for up to $750 million total of the outstanding notes from three series of “MDA notes,” as follows:

• $2 billion of 6% loan participation notes due April 12, 2017, with a minimum purchase price of $1,017.50 per $1,000 principal amount;

• $698 million of 6.315% loan participation notes due Feb. 22, 2018, with a minimum purchase price of $1,020 per $1,000 principal amount; and

• $1,513,548,000 of 6 7/8% loan participation notes due May 29, 2018, with a minimum purchase price of $1,030 per $1,000 principal amount.

For the notes with the fixed purchase prices, the company will also accept tenders for any and all of the following four series:

• A$500 million of 7½% loan participation notes due Dec. 11, 2017, with a purchase price of par;

• CHF 600 million of 3.15% loan participation notes due Dec. 16, 2016, with a purchase price of par;

• CHF 300 million of 2.9% loan participation notes due May 25, 2018, with a purchase price of CHF 4,850 per CHF 5,000 principal amount; and

• $31,406,000 of 6¼% loan participation notes due June 30, 2035, with a purchase price of $950 per $1,000 principal amount.

The company will also pay accrued interest.

The purpose of the offers is to enable VTB Bank, a Moscow-based lender, to acquire some of its outstanding eurobonds at current market prices, which is reflective of the company’s liquidity position and consistent with its ongoing liability management objectives, the filing said.

Under the modified Dutch auction procedure, the company will determine the principal amount of each series of notes that it will accept for purchase and the purchase price for each series. The purchase price will represent the lowest price that will enable the bank to purchase an aggregate principal amount of the relevant series.

Tender instructions may be submitted in the form of either a competitive offer, which specifies a purchase price higher than the relevant minimum purchase price, or a non-competitive offer, which either does not specify a purchase price or specifies a price less than or equal to the relevant series’ purchase price.

The acceptance amount for each series will be determined by VTB Bank. If the tender offer is oversubscribed, tenders will be accepted on a pro rata basis.

The offers will expire at 11 a.m. ET on July 23, with settlement expected July 30.

Barclays Bank plc (+44 20 3134 8515 or eu.lm@barclays.com) and Citigroup Global Markets Ltd. (+44 20 7986 8969 or liabilitymanagement.europe@citi.com) are dealer managers for the offers. Lucid Issuer Services Ltd. (+44 207 704 0880, attn: David Shilson, or vtb@lucid-is.com) is the tender agent.

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