MOSCOW, July 25 (Reuters) - VTB, Russia’s second-largest lender, is guiding investors towards a yield of 9.50-9.75 percent for its planned perpetual Eurobond issue, IFR, a Thomson Reuters news and market analysis service, said on Wednesday.
Coupon deferral will be at the option of the issuer with a reset at year 10.5 and every 10th year thereafter over the prevailing 10-year U.S. Treasuries plus the initial fixed credit spread, IFR added.
VTB’s Tier 1 capital adequacy ratio stood at 9.6 percent as of March 31, 2012, while its total capital adequacy ratio stood at 13.7 percent.
Perpetual bonds are permanent interest-only loans, allowing companies to take the capital gained and hold it without having to repay the principal amount - meaning they can, for example, count it towards capital.
VTB, whose capital adequacy ratios were hit by its takeover of Bank of Moscow and a recent share buyback, said in February it may need to bolster its capital if it is to grow at the same pace in 2012 as it did the previous year. (Reporting by Katya Golubkova; Editing by Mark Potter)