Brussels (Brussels Morning) Investors have bought US$ 2 billion worth of Russian Gazprom energy giant’s eurobonds, according to Gazprombank, Reuters reported on Wednesday.
The move suggests that investors see limited risk in US sanctions on the Gazprom Nord Stream 2 natural gas pipeline project worth about US$ 11 billion.
Gazprombank vice president Denis Shulakov pointed out that the yield of the bond issue on Ireland’s main stock exchange Euronext Dublin was set at 2.95%. Initial yield guidance stood between 3.25% and 3.375%, according to Refinitiv’s analytical service IFR.
The guidance was later revised to 3.125% and then to between 2.9% and 2.95% due to high demand during the bookbuilding process, according to an unnamed source in the financial market.
According to Gazprombank, demand peaked at US$ 4 billion, with demand from international investors, including those from Switzerland, the UK, the US and the Middle East, exceeding 75% of the book.
US sanctions on Nord Stream 2
The US imposed sanctions on a Russian ship working on the Nord Stream 2 this week, after warning that sanctions would be imposed on the gas pipeline project.
“The imposition of any additional sanctions is negative for company sentiment at this stage, but in our baseline scenario we anticipate that the project will be completed,” Russian ATON brokerage noted on Wednesday.
Gazprom warned in the eurobond prospectus that the Nord Stream 2 project could be delayed or scrapped due to political pressure.
The last time Gazprom tapped the bond market was in October last year, when the company raised US$ 1.4 billion worth of perpetual bonds that came with a yield of 4.6% and an additional 1 billion euro worth at a yield of 3.9%.
This year, the company plans to raise about US$ 7 billion on Russian and foreign markets.
Moscow’s Domodedovo Airport is planning to tap the market this week, seeking to issue seven-year eurobonds denominated in US dollars to refinance some of its obligations due in 2021 and 2023.