PROMOMED DM LLC made its debut placement of exchange-traded bonds for 1 billion rubles
On Wednesday, December 23, 2020, PROMOMED DM LLC successfully closed the order book for the debut issue of exchange-traded bonds on the Moscow Exchange. Investors were offered securities with a total par value of 500 million to 1 billion rubles with maturity of 3 years. The issue of securities aroused increased interest among market participants: demand exceeded supply by one and a half times and allowed the volume of issue to be increased to the upper limit of the range. This emission allowed to rise 1 billion rubles; the coupon rate was 9.5% per annum.
The demand for new bonds is quite understandable: for the first time in the past few years, bonds of a Russian pharmaceutical company will appear on the open market, which will allow investors to diversify their portfolios with attractive fixed income instruments.
For reference: at the end of November 2020, the Expert RA rating agency assigned a credit rating to PROMOMED DM LLC at the ruBBB + level with a stable outlook. One of the criteria for assigning the rating was the consolidated financial statements under IFRS, audited by Deloitte. Thus, the pharmaceutical company was able to enter the open borrowing market, and on December 18, 2020, the Moscow Exchange registered 3-year bonds of the issuer with a par value of RUB 1,000 of series 001Р-01. The issue was assigned registration number 4B02-01-00560-R-001P.
The periodicity of the coupon payment will be 182 days. The guarantor for the issue is the production site of the Bikhimik JSC holding (MOEX: BIOH). The issue was organized by Raiffeisenbank, the co-organizers were Otkritie Bank, IFC SOLID and UNIVER Capital. The technical placement of the bonds will take place on the Moscow Exchange on Friday, December 25.
The investment program of PROMOMED DM is focused on the development and production of active pharmaceutical ingredients (API) and finished dosage forms, the construction of new laboratories and workshops. In the near future, the company plans to focus on the creation of innovative antiviral, antibacterial, endocrinological and cancer drugs.
The initial placement of bonds took place against the background of instability in the exchange markets caused by the global economic downturn and the spread of the coronavirus pandemic. The Chairman of the Board of Directors of PROMOMED Petr Bely noted that despite the unfavorable market conditions, the results of the placement turned out to be quite impressive. «We have set the coupon rate at the level of 9.5%, which is comparable to the indicators of the largest issuers that have been on the public borrowing market for a long time. This is our great achievement,» he said. «It is important that the placement was absolutely market-based. A large number of bids were collected, including from minority shareholders, and we have the right to count on good liquidity of our bonds in the secondary market. In the future, the company will continue to work to preserve and improve its achievements.»
Promomed Group is the leader of the Russian pharmaceutical industry in the production of drugs for infections with its own research and production site Biokhimik in Saransk. The company's portfolio includes more than 150 names of medicines, 80% of which are included in the list of VED.
