Sovcombank arranges the largest green bond issue in the Russian market

SFO RuSol 1 has launched three exchange-traded bond issues with a total nominal value of RUB 5.7 bn. The proceeds will be used to refinance the loans to build the solar power plants. RAEX-Europe has verified the green status of the bonds.

Secondary trading of the bonds started on 11 March 2020 after the report was registered on 2 March 2020. The bonds were issued to refinance the bank loans received by Sun Projects 1 and Sun Projects 2 for the construction of Zavodskaya SPP and Promstroymaterialy SPP. The two solar power plants were commissioned in the Astrakhan Region in 2017–2018. Bond payments are backed by the revenue generated by the SPPs. Zavodskaya SPP and Promstroymaterialy SPP operate under long-term capacity supply agreements signed with them as qualified renewable power generation facilities.

Investors were offered issues of 10-year exchange-traded bonds collateralised by receivables of Classes A, B and C. Final rates of the first coupons stood at 9.516%, 13.516% and 16.016% per annum, respectively. The coupon rates are floating and linked to the rate of long-term government liabilities used for settlements in the wholesale electricity and capacity market.

Mikhail Avtukhov, Head of CIB and Member and Deputy Chairman of the Management Board at Sovcombank:

“The deal is the largest green bond issue in the Russian market, and we are highly pleased to act as its arranger and market maker. This is also a landmark transaction marking Russia’s first-ever synthetic securitisation. This scheme previously used in global markets only (SFO issues a loan from the proceeds) has now been successfully tested under Russian laws. We expect to continue developing the green and social bond business in line with the bank’s strategy and the UN Principles for Responsible Banking.”

RAEX-Europe (Rating-Agentur Expert RA GmbH) issued a Verifier’s Second Party Opinion for the issuance of green bonds of SFO RuSol 1. It confirms that the Green Bonds Framework of Sun Projects and Sun Projects 2 are aligned with the four core components of the Green Bond Principles (ICMA GBP).

ACRA Credit Rating Agency assigned еА+ and еВВВ+ ratings to Class A and Class B bonds of SFO RuSol 1, respectively.

Publication date: 19 March 2020