American Caterpillar was the first among foreign companies entered the market of ruble-denominated Eurobonds. Foreign manufacturer of construction machinery attracted ruble funding is cheaper than Russia’s largest state-owned companies.
American manufacturer of heavy construction equipment Caterpillar enters the market of ruble Eurobonds. The Company places a three-year loan on preliminary data yielding 7,625-7,875%. The loan — 5,000,000,000 rubles.
Company representatives declined to comment.
Market source told BFM.ru, that due to high demand yield of the loan was reduced to 7.5-7.62%, and in the end the issue was placed at 7.5%. For comparison, the average rate on deposits among the 10 largest Russian banks now stands at 9.65%.
Caterpillar Inc was established in 1925 through the merger of Holt Manufacturing Company and the CL Best Tractor Co. 100% of the shares are freely traded on the New York Stock Exchange
Caterpillar — the world’s largest manufacturer of construction equipment and track. The company produces excavators, bulldozers, tractors, extra-heavy trucks, engines and spare parts. Total — more than 300 types of machines. In 2011, revenues were $ 60.1 billion U.S. dollars, net profit — $ 4.9 billion.
The actual issuer of the securities will head structure with a rating of "A" level, making the loan and is placed at such a low rate indicates the portfolio manager of the IR "Third Rome" Alex Bizin. "Ruble borrowers with credit rating almost impossible to find. Because of the rather low rate loan to private investors is unlikely to be interesting, and the main buyers of the securities will be the banks, for which the purchase of the bond issue because of the high ranking does not require the creation of significant reserves ", — experts predict.
Earlier denominated Eurobonds placed and Russian companies, but their yields accounted for sovereign risk of the Russian Federation. Yield similar to the parameters of ruble bonds Railways — 8%, "RusHydro" — 8.3%. Thus, the market is willing to give rubles into foreign debt of the company, not Russian issuers.
Interviewed BFM.ru bond market participants could recall only one case in which foreign companies released denominated Eurobonds. Thus, the uranium miner Uranium One year ago he sold Eurobonds by 16.5 billion rubles at 9.75%, but it is necessary to stipulate that the beneficiary company is holding "ARMZ", controlled by the Russian state corporation "Rosatom".
Probably, Caterpillar took a ruble funding, and to take the currency swap would be more expensive than post bonds indicates analyst "Aton" Rinat Kirdan. The expert admits that the funds are needed Caterpillar primarily for the development of the local unit, and not to reduce the foreign exchange risk. It is highly unlikely that other western companies will soon rush to the market of ruble Eurobonds.