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Russia's Promsvyazbank buys back some subordinated Eurobonds maturing in 2019
September 28, 2017 / 11:51 AM / in 21 days

Russia's Promsvyazbank buys back some subordinated Eurobonds maturing in 2019

MOSCOW, Sept 28 (Reuters) - Promsvyazbank, Russia’s tenth largest lender by assets, has bought back from the market part of its subordinated Eurobond issue maturing in 2019, it said on Thursday.

Promsvyazbank (PSB) now owns 37 percent of the total volume of the 2019 Eurobonds, worth $105.4 million, the bank said in a statement published on the Irish Stock Exchange.

PSB did not give a reason for the buyback and did not immediately reply to a request for comment.

Some Russian subordinated Eurobonds have come under pressure since the central bank announced a bailout of Otkritie, once Russia’s largest private bank.

Central Bank Deputy Governor Vasily Pozdyshev told Reuters some of Otkritie’s subordinated bonds, whose terms do not require conversion, could be written down if Otrkitie’s capital adequacy fell below a certain level.

Earlier this week, Rossium, the investment vehicle that controls Credit Bank of Moscow, among other assets, said it might buy three subordinated Eurobonds issued by Credit Bank, Russia’s No.9 largest lender.

Yields of PSB’s subordinated Eurobond maturing on Nov. 6, 2019, rose to 14.6 percent on Thursday, their highest since March 2015. An increase in the yield means the price of the Eurobond has dropped.

The value of the Eurobond has been declining since June amid concerns about the health of Russia’s banking sector. The central bank has rescued two of the country’s largest private banks, Otkritie Bank and B&N Bank, over the past month.

PSB issued the subordinated Eurobond in 2012, raising $400 million. A year later, it added another $200 million to the issue. (Reporting by Kira Zavyalova; Writing by Andrey Ostroukh; Editing by Katya Golubkova and Mark Potter)

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