Naftogaz starts book building for Eurobonds
12 July 2019
Ukraine’s leading natural gas company, Naftogaz
(NAFTO), started book building for two issues of Eurobonds on July 12, Interfax-Ukraine
reported the same day. The company offers one issue of five-year
Euro-denominated Eurobonds and one issue of three-year of U.S.
dollar-denominated Eurobonds.
The minimal volume of U.S.
dollar Eurobond issue will amount to USD 300 mln, while the volume of
Euro-denominated issue should start from EUR 500 mln. The total volume of the
two issues should not exceed EUR 900 mln.
The pricing guidance for 3Y USD-denominated Eurobonds
is around 7.75%, for 5Y EUR-denominated Eurobonds – 7.5%.
Evgeniya Akhtyrko: It looks
like Naftogaz decided to diversify risks by splitting the issue into two
currencies, though its previously announced plan called for the issue of only
euro-denominated bonds. The announced pricing guidance of euro-denominated Eurobonds
coincided with the upper end of our estimate range for the EUR 5Y
yield. We calculate that the guidance implies the spreads
to Ukraine’s sovereign curve of about 200-215 bps for the two tranches.
