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Gazprom PJSC, the natural-gas export monopoly, has hired banks to organise a sale of Swiss-franc debt in what could be the first Eurobond deal out of Russia this year.
Europe’s biggest gas supplier picked Deutsche Bank AG, Gazprombank JSC and UBS Group AG as joint lead managers and Renaissance Capital as a co-manager for investor update meetings in Geneva and Zurich on March 14 and 15, according to a person familiar with the deal who asked not to be identified because the information is private.
A Swiss franc-denominated debt sale may follow, subject to market conditions, the person said.
Gazprom was one of only a handful of issuers last year that collectively raised about $4 billion in dollar- and euro-denominated bonds. That was less than 10 percent of the record amount sold in 2013 before western sanctions over Russia’s role in Ukraine’s military conflict blocked borrowers from international markets. Gazprom, which isn’t sanctioned, has seen its yields fall this year as appetite for Russian assets rebounded with recovering oil prices.
“It makes a lot of sense given where yields are right now and the likely appetite for a new issue by investors,†said Gabriele Bruera, an emerging-market money manager at Compass Asset Management SA.
Gazprom’s Swiss-franc notes due in 2019, its only debt denominated in the currency, have climbed this week, reducing the yield 30 basis points to 3.64 percent.
Companies in emerging markets raised 1.35 billion in Swiss francs ($1.4 billion) last year, compared with
almost 7 billion francs
in 2013. Petroleos Mexicanos was the last company in developing nations to issue a bond in the currency when it sold debt due in 2020 last November. The yield on that note fell two basis points on Friday to 2.82 percent.
The scarcity of new Swiss franc bonds means demand for the Gazprom issue may be strong, according to Daniel Rempfler, a money manager at Swiss Life Asset Managers in Zurich.
“Issuance dropped significantly during the last years,†Rempfler said.