KOMMERSANT. A subsidiary of French lender Societe Generale, Rusfinance Bank, could again tap the debt market with another bonded loan to be offered by the end of the year, the business daily wrote Friday.
On May 13, Rusfinance Bank fulfilled its obligations under Rub 4 bln 3-series bonds with Rub 1,000.00 par value each that were floated on MICEX Stock Exchange in May 2007. “To redeem the bonds the bank mainly used resources received from the parent company, Societe Generale, and through amortization of the credit portfolio," head of Rusfinance Bank treasury department Sergey Patrin specified. After this bonded loan was redeemed, in circulation is only one bonded loan of the Russian-French lending institution that is also worth Rub 4 bln. It’s noteworthy that more than a year ago the bank abstained from placing new bonds, referring to the unattractive cost of borrowing and the unfavorable market environment. On Thursday Patrin noted that “the market has showed signs of recovery and provided that positive trends remain the bank could not rule out offering bonds this year”.
It should be noted that the coupon yield on this bank’s bonds never exceeded 8%. And when it received bids to take money at 10.25—12.3% under a fifth bonded loan in 2008 the lending institution simply decided not to borrow despite big demand for its fixed-income instruments. Two already registered bond issues of the bank were cancelled for similar reasons. So, in 2008 the bank failed to raise Rub 12 bln on the debt market. “The lending institution could intend to take money on the ruble-denominated bond market in the next six months. Latest news that Societe Generale tightened its policy towards its Russian subsidiaries, Rosbank in particular, (sizeable staff cuts were announced, branches were closed in a bid to contract expenses because of weakening demand for consumer loans by more than 40%), underscore that the French bank’s subsidiaries will have to take similar actions. Rusfinance Bank will definitely revise its yield requirements," head of research at BCS Consulting Vitaly Antonov believes. According to the newspaper, similar actions have not yet been applied to Rusfinance Bank. Furthermore, last year the lending institution finished with improvements in all headline financials, including net profit that surged 5.5 times.
