MDM Bank Repurchases Ruble Bond and Places Back to Market
09.10.2007 19:48
Moscow, October 9, 2007 - Today, MDM Bank bought back 99.9% of its RUR 6bn bond in accordance with the put option embedded in the bond issue. As the Bank expected, investors have exercised the put option for the bonds as the coupon of 8.5% per annum for the next two coupon periods does not correspond to the current market level for private bank securities. The coupon rate was set by the Bank in order to retain flexibility in the unlikely but possible event of a significant improvement in market conditions. Following the repurchase of the bonds, all of them have been placed back in the market among high-quality (“real money”) investors with a yield of around 11% per annum plus commission to international banks, which have assisted MDM Bank in structuring this successful placement. The new effective yield level reflects the rise in market interest rates as well as the premium for the new placement, which is adequate in the current environment.
The CEO of MDM Bank Michel Perhirin said: “MDM Bank is very pleased with the outcome as it allows the Bank to satisfy growing demand for loans, including that originating from clients of other banks, and simultaneously keep intact the large liquidity cushion accumulated by the Bank as a precaution against continued market turmoil. MDM views the bond sale as the first true market placement, not a club deal, for a private Russian bank in the new market environment, which can serve as a good benchmark for other banks”.
MDM Bank
MDM Bank was founded in December 1993 and holds a General Banking License issued by the Central Bank of Russia (#2361 dated 13 February 2003). MDM Bank is one of the most dynamically developing banks in Russia and is among the top Russian banks according to assets and equity. Today, MDM Bank is a modern universal financial institution offering a full range of services to its clients. MDM has one of the highest credit ratings among privately-owned Russian banks – Standard & Poor’s (BB, stable), Fitch Ratings (BB, stable) and Moody’s (Ba1, stable) – and is the only Russian financial organization that has been given a public corporate governance rating by Standard & Poor’s (6+). In October 2006, Standard and Poor’s awarded MDM Bank the highest ranking in its study of ‘Transparency and Disclosure by Russian banks’. The Bank was also regarded by Euromoney magazine as “one of the leading banks in Russia and Emerging Europe, applying the most advanced standards of corporate governance.” MDM Bank has received a number of awards from Global Finance magazine: 2005 – ‘Best Domestic Bank’ and ‘Editor’s Special Award for Transparency’. 2006 – ‘Best Forex Bank’, ‘Best Domestic Bank’, ‘Best Domestic M&A Arranger’, and ‘Best Bank in Corporate Governance’. In October 2006, Euromoney magazine awarded MDM Bank ‘Leading Bank in Corporate Governance in Emerging Europe’. 2007 – ‘Corporate Governance Editor’s Award’, and ‘Best Forex Bank’.
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