PFI Energy Finance Briefing
The 20-strong debt capital markets team at Russian investment bank?VTB Capital?has worked on 72 bond issuances this year, 50 of which were local bonds in Russian and the CIS, and 20 or so were international bonds,Andrey Solovyev, global head of DCM told PFI Energy Finance. At present, around 90% of issuances are in the US dollar, with the remainder in local currencies such as Swiss Francs and Singapore dollars.
Moving forward, VTB Capital aims to continue diversifying its investor base by originating the mandate for a bond in Russia and the CIS, and then distributing it globally via its sales and trading offices. The group has a growing sales and trading base in Singapore, and has recently opened an office in Hong Kong.
Out of the 72 bond issuances carried out by VTB Capital this year, the energy sector ranked second in the local issues after the finance sector in terms of volume. Energy did not feature at all in VTB’s 20 or so international bond issuances, which were dominated by the finance, mining and metal sectors. However, like many others, Solovyev believes the role of DCM transactions will grow as traditional lenders bow out of the market. “Many investors have got substantial liquidity, however, they are waiting for more certainty in the market to put their money in new deals. At this point, DCM deals are likely to take off.” Solovyev said.
The DCM team at VTB Capital currently consists of around 20 professionals, with 60% based in Moscow and focusing on the local markets and 40% in London, focusing on the international. VTB Capital’s market share in the secondary trading of Russia & CIS Eurobonds is around 11-12%.