Pi Capital
Date of publication: 04 February 2020
Today we will look at one debt security as investment ideas for this week: GTLK


Last week, the Central Bank of the Russian Federation included two GTLK Eurobonds with maturities in 2025 and 2026 in the Lombard list. This issuer has 4 placed Eurobonds, and now the Central Bank provides refinancing for all these issues. We mark the farthest paper in the line of Eurobonds of the company (with a duration of about 5 years), according to which it is still possible to fix a 4% yield.

The senior issue of GTLK in the amount of 550 million pounds was placed in September last year at 4.949% per annum. Options for early recall and / or change of coupon level are not provided. The minimum paper lot is $ 200 thousand. The Eurobond is serviced by NSD and is available only to qualified investors.

Against the backdrop of growing global investors' demand for green bonds, we are paying attention to the only such foreign currency instrument with Russian risk. We are talking about the Euro issue of Russian Railways placed in May last year with maturity in 2027. The allocation of funds was certified by an external reviewer with an annual report on their use. The issuer also noted that it follows the recommendations of the Executive Committee of the Green Bond Principles of 2018 with the support of the International Capital Markets Association and the Climate Bonds Initiative. Eurobonds were placed in euros at a rate of 2.2% per annum; securities worth half a billion euros were found by their buyers.

It should be noted that even taking into account dynamic price growth, the issue is traded with a pronounced premium in yield relative to global green papers of similar credit quality.

RZD's senior unsecured issue maturing in May 2027 is rated by Moody’s and Fitch at Baa2 and BBB, respectively. Emission Market - Eurozone. The minimum lot on paper is 100 thousand euros. Paper is serviced by NSD. Please note that the issue is also available for unqualified investors.


Alexey Shternshis

Joint Managing Director

Capital Pi 

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