SMP Bank, which is owned by the Rotenberg brothers-entrepreneurs, is going to float on the Moscow Exchange perpetual ruble-denominated subordinated bonds for a total of Rub 5 bln, with Sberbank CIB acting as arranger for the first bonded loan, a source close to the exchange told Banki.ru.
The bonds will be placed via open subscription, the yield target is kept secret, but, according to the news portal's interviewee, the yield rate is expected to be lower than Rosselkhozbank's. The proceeds will be added to core and additional capital. To remind, Rosselkhozbank came out with Rub 10 bln perpetual subordinated bonds in August 2016, and floated additional bonds worth Rub 5 bln in October 2016. At that time, the yield rate of the state-owned bank's first 20 semiannual coupons came in at 14.5%.
The fact that SMP Bank intends to issue perpetual bonds became known in late 2016. As business daily Vedomosti wrote, the proceeds will be spent "to fund general corporate needs" rather than "to fund a specific deal".
As pointed out by Sabina Khasanova, head of the news and analytical service at Banki.ru, in line with the Bank of Russia's requirements the lending institution's N1 capital adequacy ratio is met decently (13.4% as of March 1, 2017 against the 8% minimum). "The bank does not face any problems with own funds," Khasanova noted. "It looks as though SMP Bank intends to expand its credit portfolio this year".