Dom.RF Bank will raise debut subordinated debt in 2023. Unlike other issuing banks, he chose three issue organizers to facilitate placement in the current conditions. Subordinated loans allow you to quickly increase capital without losing control on the part of the main owner. However, it may turn out to be quite expensive, since for investors these are securities with increased and regular income.
Sberbank will be involved in attracting investors for the debut issue of subordinated bonds (which are included in the calculation of capital) of Dom.RF Bank , Gazprombank and Alfa-Bank, traditionally the country’s largest organizers of bond transactions (see Kommersant of July 16). This was reported to Kommersant by a representative of the customer bank. The preliminary volume of the issue is set at 5 billion rubles, but may be changed when the order book is formed. The bonds are planned for ten and a half years with a redemption option in five and a half years. Sberbank’s obligations to place bonds amount to 50% of the issue, while the rest have 25% each. The parameters were set following the results of the auction, which ended the other day. Organizing banks requested a fee of 1.5% of the nominal volume of the issue. The placement itself may take place in the first half of 2023.
The placement of subordinated bonds is a rather rare way to increase capital. In particular, last year, foreign exchange subords were placed mainly by state-owned banks, limited in raising equity capital due to sanctions, VTB, Sberbank and GPB (see Kommersant of January 12). This year, they, as well as a number of other banks (MTS Bank, Sovcombank, RSHB) planned to raise funds in capital in this way. At the same time, as a rule, subordinated bonds are placed by the issuing banks themselves.
Until now, the main source of replenishment of the capital of Dom.RF Bank was direct injections from the parent structure – JSC Dom.RF . In 2021, the authorized capital of the bank increased by 31.5 billion rubles, this year it will be increased by 30 billion rubles. The bank explains the emergence of subordinated bonds by “diversifying sources of funding” and searching for “new sources of growth.”
senior director for banking ratings at Expert RA Vladimir Teterin.
Shares of state-owned banks were not interesting even before the outbreak of hostilities, as evidenced by the failed IPO of FC Otkritie (see Kommersant dated December 21 2020), notes one of the portfolio managers. According to him, now it will not be possible to attract equity capital on market conditions. Therefore, subordinated bonds are preferable for both the bank and investors to the issuance of shares.
“For the bank, this is an opportunity to raise financing relatively quickly and at low cost, which can be included in the capital, while shareholders’ control is not reduced” , – explains the head of the department of credit analysis of the management company “Ingosstrakh-Investments” Evgeny Vorobyov. “It allows an investor to receive a predetermined interest income and not depend on the payment of dividends, which can be canceled, for example, in the event of a decrease in profits,” adds Mikhail Doronkin, managing director of the NKR rating agency.
Together with At the same time, Alexei Bulgakov, head of the debt market analytics department at Renaissance Capital, notes that the issue of subordinated debt will be quite expensive. According to him, the yield of the new bond will have to be more than 300 basis points higher than the OFZ yield. According to analysts, Dom.RF Bank may place bonds at 11-12% per annum. But even in this case, it will be difficult to issue a subordinary, the head of Arikapital, Alexei Tretyakov, believes. “Even in ordinary bonds of Rosnano, STLC, judging by their quotes, the risk of defaults increases. What can we say about subords,” he notes. However, Mr. Doronkin clarifies, at the moment, Dom.RF Bank demonstrates a high level of return on capital, which makes it possible to resort to a paid source of its formation.