LenSpetsSMU (CJSC) successfully placed USD 100 mn debut CLN issue

On Thursday April, 26 LenSpetsSMU (CJSC) – the leading construction and development company in the North-West region of Russia – successfully placed USD 100 mn debut CLN issue. OJSC JSCB “ROSBANK” acted as a sole lead-manager of the transaction. The notes have already started trading.

The coupon rate was set at 9.75%. The notes mature in 5 years and specify a two-year put option and typical set of covenants. The transaction structure specifies an SPV – Golden Ring Finance – as the issuer, LenSpetsSMU CJSC – head operating company and consolidation center of the Group – as the borrower and the other three largest operating companies acting as guarantors.

The bid book closed April, 23 with a considerable oversubscription. Marketing strategy was more focused on quality accounts resulting in 53% of the issue placed among foreign investors. The remaining volume was purchased by Russian investors.

Extensive marketing campaign with road show covering London, Geneva, Zurich, Singapore and Hong-Kong yielded a well balanced and diversified bid book – both regionally and investor type-wise. The issue was allocated among large and mid-sized international and Russian banks, asset management companies and hedge funds.

Most of the proceeds will be used to finance acquisition of land plots for development purposes.

According to the lead-manager OJSC JSCB “ROSBANK” the placement was successful despite a rather tight situation on the dollar debt market and investors’ ambiguous attitude towards the Russian construction and development industry. The placement will definitely grade up the quality of company’s debt and improve its competitiveness.

Commenting on the placement results, vice-president of “Etalon-LenSpetsSMU” Holding Mr. Evdokomov said: “The successful placement of CLN follows the company’s strategy of using the financial market resources to expand our operations. To LenSpetsSMU and the Holding as a whole this event marks the next step of long and arduous work in preparing the company for cooperation with a wide range of financial partners, including internationals. The confidence from the open financial market given to the company confirms the perfect condition and prospects of our business, high professionalism of management and specialists of the company, and a high level of transparency and understandability of the business for potential partners and investors. No doubt, we could strengthen and improve achieved results.”