BCS Capital, an investment products provider which is part of BCS Financial Group, has placed its series 03 ruble-denominated structural bonds (state registration number 6-03-00508-R) on the Moscow Exchange. This is the first structured bond issue registered under Russian laws which is part of BCS Capital’s and Moscow Exchange’s joint project.
Issue size – RUB 600 million;
Face value – RUB 1,000;
Bond maturity – 3 years;
Placement price – 100% of the face value.
The bonds are placed via private subscription among qualified investors.
Series 03 bonds are an instrument with partial capital protection, the key asset of which is represented by shares and depositary receipts of major Russian issuers such as Gazprom, Lukoil, Norilsk Nickel, Sberbank, and Yandex. Parameters of the structured bond issue are as follows: threshold – 80%, annual ruble rate – 16%*, interest is paid every six months.
Edward Golosov, Head of BCS Capital, Deputy CEO and Deputy Chairman of the Executive Board responsible for investment and insurance business, FG BCS, said: “This issue is an example of import substitution in the investment sector: until recently, Russian investors had access to structured bonds issued only by Western issuers. FG BCS is happy to be a leader in this field and to be the first company to offer Russian investors comprehensive structured products created within the Russian legislative framework. We think that this instrument has great potential.”
Anna Kuznetsova, Member of the Executive Board, Managing Director of Securities Market, Moscow Exchange, added: “Structured bonds are very popular among global clients with different amount of investments; they use them to diversify their investments and to hedge certain risks. We are happy to see the emergence of the first structured bonds under Russian laws and we hope they will take their proper place in our citizens’ investment portfolios. The expansion of the product line is particularly relevant when new private investors enter the Russian stock market: more than three million retail investors have been already registered on the Moscow Exchange; every month, we see more than 150 thousand new individual investors enter the stock market. The new instrument will become more popular due to a special section on the Exchange’s website dedicated to structured bonds; we are working on it together with key debt market participants.”
Denis Buryakov, Managing Director for Depository Operations, NSD, pointed out: “Structured bonds are one more step towards the market development; they represent new opportunities and added value for investors. The emergence of this new instrument reflects the sector’s maturity, and allows investors to select the less risky financial product. NSD has been working consistently on the servicing technology to develop instruments. As of 2019, we are ready to accept and service Russian issuers’ structured bonds, and to provide clients with services focused on supporting issuing these instruments and processing corporate actions involving them.”
Franz Hep, Managing Director for Structured Products, BCS Capital, said: “Against the backdrop of reduced interest rates on bank deposits and classic bonds, investors are searching for more profitable instruments. Structured bonds allow clients to get additional income, and we can see wealthy clients’ demand for these securities. Our task is to help clients select successful investment ideas and achieve their financial goals.”
The Moscow Exchange added series 03 and 04 structured bond issues to its third listing level.
Issue size – RUB 600 million;
Series 03 and 04 bond maturity – 3 years;
Placement price – 100% of the face value.
Early repayment and additional income receipt are available. The bonds are placed via private subscription among qualified investors.
The bonds are issued by LLC SFO BCS Structured Notes, a specialized company. BCS Capital is the organizer of the issue. LECAP is a legal consultant on the issue. LCPIS is a representative of the bond holders under Russian laws.
BCS Capital (www.bcscapital.ru), a part of FG BCS, provides investment and insurance solutions. It unites all business lines of the Group focused on solving client investment tasks – structured products, asset management, and life insurance (LLC BCS Company, JSC AMC BCS, and LLC IC BCS Life Insurance).
* Or 8% for a six-month observation period.