The European Bank for Reconstruction and Development (EBRD) has launched a Rb2bn fixed rate Eurobond aimed at international investors to enable the bank to respond to the growing demand of its clients in Russia for local currency financing.

The bank’s Rb2bn bond has a five-year maturity and pays a coupon of 6%, with a re-offer price of 99.72%, yielding 6.067%. The issue is lead-managed by Royal Bank of Canada Capital Markets. The bonds will be cleared through Clearstream and Euroclear (pending confirmation).

The EBRD had up to now raised a total of Rb17.5bn to finance a broad range of projects in its largest country of operation, issuing three rouble bonds aimed at domestic investors on the Russian floating rate market since 2005. The switch to tapping the Eurobond market for roubles was made possible by the Russia’s latest currency liberalisation last year.

When the EBRD first tapped the Russian bond market in May 2005, its loan portfolio included seven rouble loans totalling Rb3.8bn. By the time it returned to the market for the third time less than 18 months later in September 2006, the EBRD had 22 such loans totalling Rb30.1bn, of which Rb8bn had been syndicated to the market.

This trend is continuing as the EBRD’s Russian business volume surges.

Ratings: Aaa (Moody’s), AAA (S&P), AAA (Fitch)