SSEECCUURRIIITTIIIEESS MMAARRKKEETT NNEEWWSSLLEETTTTEERR weekly Presented by: VTB Bank, Custody April 22, 2021 Issue No. 2021/15 Market News Central bank places RUB 4.98 bln coupon bonds out of RUB 23.6 bln On April 20, 2021 it was reported that Russia’s central bank had sold RUB 4.975 bln out of RUB 23.601 bln coupon bonds during the day. The cut-off and the weighted average prices amounted to 100% of a face value each. Demand totaled RUB 5.017 bln. The settlement date was April 21. Finance Ministry fully places RUB 20 bln OFZ bonds On April 21, 2021 it was stated that Russia’s Finance Ministry had fully placed during the day RUB 20 bln of OFZ 26236 government bonds with a fixed coupon maturing in May 2028. The cut-off price and the weighted average price amounted to 93.11% of a face value. The cut-off yield and the weighted average yield stood at 7.07%. Demand for the bonds totaled RUB 83.7 bln. Company News MTS raises stake to 100% in 6 local fixed-line operators On April 15, 2021 it was stated that Major Russian mobile operator MTS had exercised a call option with provider of broadband and digital TV services Zelenaya Tochka Group to buy out the remaining 49% of the group’s capital in six local fixed-line network operators. Altogether, this deal will provide opportunities to more than one million Russian households to expand access to advanced solutions from across the MTS digital ecosystem. In February 2020, MTS acquired a 51% stake in Zelenaya Tochka Group – comprised of 13 local fixed-line Internet providers – via an agreement that included a provision for a three-year call option on the remaining share capital. ER-Telecom sets RUB 5 bln bond coupon final guide at 8.4% On April 15, 2021 it was reported that Russian Internet and pay TV provider ER-Telecom Holding had set the final guidance for the coupon rate for RUB 5 bln 3-year exchange bonds at 8.4% annually. The coupon guidance was first set at 8.7–8.9% annually, which corresponded to a yield to maturity of 8.99–9.20% annually. During the book building, it was reduced to 8.4–8.5% with a yield of 8.67–8.78%. The technical placement is scheduled for April 19. Otkritie Bank, Raiffeisenbank, and VTB Capital are organizers of the placement. ER-Telecom raises 3-year bond offer to RUB 7 bln On April 15, 2021 it was reported that Russian Internet and pay TV provider ER-Telecom Holding had increased the volume of its 3-year exchange bonds to RUB 7 bln from RUB 5 bln. The company set the final guidance for the coupon rate at 8.4% annually with a yield to maturity of 8.67% annually. The technical placement took place on April 19. Otkritie Bank, Raiffeisenbank, Gazprombank and VTB Capital are organizers of the placement. VTB to continue buying OFZ government bonds On April 16, 2021 CEO of Russia’s second biggest lender VTB Andrei Kostin told Rossiya 24 television channel that VTB plans to continue buying OFZ government bonds, but there are circumstances that may affect the size of new investments. The volume of the OFZ portfolio at VTB currently stands at RUB 1.7 trln. 1 Setl Group increases bond offering to RUB 7.5 bln On April 16, 2021 it was reported that Russian real estate developer Setl Group had increased the offering volume of its 3-year exchange bonds to RUB 7.5 bln from RUB 5 bln. The final guidance for the first coupon rate of the bonds was set at 8.50% annually, which corresponds to a yield to maturity of 8.77% annually. The initial guidance was 8.50–8.85% annually. The issue carries quarterly coupons. The technical placement was scheduled for April 21. Brokerage company Region, VTB Capital, Alfa-Bank, Gazprombank, BCS Global Markets, SKB-Bank, and Sovcombank act as the organizers of the placement. MTS buys back 0.059% of capital via unit under buyback program On April 16, 2021 it was stated that Bastion, a wholly-owned subsidiary of major Russian mobile operator MTS, had acquired 1,097,836 MTS ordinary shares, representing 0.05% of the operator’s capital, and then 190,400 ordinary shares, or 0.009%. MTS’ board of directors approved a RUB 15 bln buyback program in mid-March, to come in force from March 30 throughout 2021. Under the program, MTS will spend a part of the amount on the acquisition of shares from the market with the rest to buy shares from its parent, multi- industry holding Sistema. TMK to buy out ChelPipe from owners for RUB 318 per share On April 16, 2021 it was stated that Russian pipe producer TMK had announced a buyout offer to minority shareholders of Chelyabinsk Pipe Plant (ChelPipe) with a price of RUB 318.26 per share. The offer remains in force through June 25. A total of 41.134 mln shares can be purchased. In mid-March, TMK announced the closure of a deal to buy 86.54% in ChelPipe from its main owner Andrei Komarov. M.Video-Eldorado raises 2-year bond offer to RUB 10 bln On April 20, 2021 it was reported that Russian electronics retailer M.Video–Eldorado had increased the offer of 2-year exchange bonds to RUB 10 bln from at least RUB 5 bln and set the final coupon rate at 7.3% annually, which corresponds to a 7.43% annual yield to maturity. The initial coupon guidance was set at 7.3– 7.55%, it was later cut to 7.25–7.3% annually. Bids for the bonds were collected on April 20. The bonds will carry semiannual coupons. Alfa-Bank, VTB Capital, Gazprombank, Credit Bank of Moscow, Russian Agricultural Bank, Sberbank CIB, and Sovcombank are the organizers. Tatneft not to swap preferred shares for ordinary stock On April 20, 2021 assistant to the general director for corporate finance of Russian oil company Tatneft Vasily Mozgovoi said in an online conference that the company was not considering exchanging the preferred shares for ordinary stock. He mentioned that they had been considering this possibility previously, but it had some prerequisites connected to the fact that there was a significant discount in the preferred shares as compared with the ordinary stock. He said the discount is almost non-existent now, this is why the company was not considering the exchange. The republic of Tatarstan’s state holding Svyazinvestneftekhim owns 27.23% in Tatneft, The Bank of New York Mellon has 22.85%, and the government of Tatarstan owns the golden share. 25% of Otkritie FC Bank to be sold at first privatization stage On April 20, 2021 CEO of Russia’s Otkritie Financial Corporation (FC) Bank Mikhail Zadornov told reporters that 20–25% stake in the bank may be sold during the first stage of privatization, the exact stake will be defined until May 2022. The central bank acquired 99.99% in Otkritie FC Bank after a bailout, and initially planned to sell the bank at the end of 2021, but delayed it due to the coronavirus pandemic. In December 2020 Zadornov said that privatization should happen in mid-2022. Rostelecom doesn’t plan to convert preferred shares into ordinary On April 20, 2021 President of Russian state-controlled telecom operator Rostelecom Mikhail Oseyevsky said on the Investor Day that the company doesn’t plan to convert preferred shares into ordinary ones as there is no necessity in the move. He mentioned that preferred shares are popular among investors, and the gap in the yield is quite appealing. Oseyevsky also said the government does not plan to make the company private. MOEX registers Mail.ru Finance bond program of up to RUB 100 bln On April 20, 2021 it was stated that the Moscow Exchange had registered an indefinite program of exchange bonds of up to RUB 100 bln by Mail.ru Finance, a subsidiary of Internet company Mail.ru Group. The bonds mature in almost 15 years, or 5,460 days from the placement of bonds of a special issue under the program. 2 Gazprom board approves raising stake in Gazpromviet to 81.3% On April 20, 2021 it was reported that the board of directors of gas giant Gazprom had approved raising the stake in Russian–Vietnamese joint venture Gazpromviet to 81.3% from 79.6%. The value of Gazprom’s stake of 81.318% will amount to around RUB 2.538 bln. Dividends Evraz board approves paying USD 291.7 mln in interim dividends On April 15, 2021 it was stated that the board of directors of U.K.-based mining giant Evraz, which operates mainly in Russia, had approved paying USD 0.2 per share, or a total of USD 291.7 mln, in interim dividends. The record date was set at May 28, while the dividend payment is expected on June 25. Severstal can pay RUB 46.77 per share in dividends for January–March On April 16, 2021 the board of directors of Russian steelmaker Severstal had recommended paying RUB 46.77 per share in dividends for January–March. The shareholders will decide on the matter at a meeting on May 21. The shareholder register for participation in the meeting will be closed on April 26. Severstal paid RUB 27.35 per share in dividends for January–March 2020. In 2020, the company also paid RUB 15.44 per share, or a total of RUB 12.93 bln for April–June and RUB 37.34 per share, or a total of RUB 31.28 bln for July–September.