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Detsky Mir announces book closing of exchange-traded bonds of rub 3 bn with the coupon rate of 9.50%

Detsky Mir Group (MOEX: DSKY / “Detsky Mir” or “the Company”), Russia’s largest specialized children’s goods retailer, announces the successful book closing of its series BО-04 exchange-traded bond issue with a nominal value of RUB 3 bn and a coupon rate set at 9.50% p.a.

TRANSACTION DETAILS

  • On April 4, 2017 PJSC Detsky Mir opened order book for the RUB 3 bln Series BO-04 bond issue with the initial price guidance of 9.85-10.10% p.a.
  • During the marketing investor demand significantly exceeded the bond issue size that allowed the issuer to revise the marketing range twice from the initial level down to 9.50-9.55% p.a.
  • The book was closed at lower end of the final range with more than 2x oversubscription. More than 50 orders for the total amount of over RUB 12 bn have been received from a wide range of investors.
  • The final coupon rate was set at 9.5% p.a., which was below the Central Bank of Russia key rate and corresponded to the spread of 150-160 bps to govt curve – a record level for single B rated issuers.
  • The settlement of the bond is scheduled on April 7, 2017 at PJSC Moscow Exchange. JSC VTB Capital, JSC Raiffeisenbank and JSC Sberbank CIB acted as Lead Arrangers of the transaction.  Gazprombank (JSC) will act the the placement agent.

Vladimir Chirakhov, PJSC Detsky Mir Chief Executive Officer, said:

 “This deal is a logical next step for the Company in its work for entering the public capital markets.  We are focused on improving the business efficiency and try to use all opportunities for that , including optimization of the debt portfolio structure and reduction of the cost of debt. Strong investor demand for our bond once again confirms high evaluation of the growth potential and credit quality of the Company.”

Anna Garmanova, PJSC Detsky Mir Chief Financial Officer, pointed out:

“The placement of the bond issue is one more important event in the Company’s history. We are encouraged by the significant interest from capital debt market towards our bonds. The investors well appreciated the ability of the Company to show the high growth rate and the strong profitability of the business while keeping the debt burden at relatively low level. Already at the early stage of the marketing process the order book was 4x oversubscribed. Proceeds from the placement will be used for refinancing of the current credit portfolio aiming at its further diversification and cost reduction.”