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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 ’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.

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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 .

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 , 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 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 ’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 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 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.

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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 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 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 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. The core owner of Severstal is tycoon with a stake of 77.03%.

Yatec to pay RUB 504 mln in dividends for January–March On April 16, 2021 it was stated that shareholders of Russia’s Yakutsk Fuel and Energy Company (Yatec), part of A-Property company of businessman Albert Avdolyan, had approved paying 61 kopecks per share, or a total of RUB 504.421 mln, in dividends for January–March. The record date for dividends is April 26. The board of directors recommended the dividend payment, which would become the company’s first dividend payment in five years. In late 2020, Yatec approved a new dividends policy under which the company should allocate at least 30% of the net profit on dividends starting from 2021. A-Property owns 52% in Yatec directly and it also pledged a 21% stake to Novikombank under a repo deal, while closed-end investment fund Trust Union Asset Management has 25%, and free-float of Yatec is 2%.

TMK owners approve paying RUB 9.99 bln in 2020 dividends On April 16, 2021 it was reported that the shareholders of Russian oil and gas pipe maker TMK had approved paying RUB 9.67 per share, or a total of RUB 9.990 bln, in dividends for 2020. The record date was set at April 26. TMK paid no dividends for 2019. Dmitry Pumpyansky, chairman of the board of directors, is the main beneficiary owner of the company.

Nizhnekamskneftekhim to pay RUB 0.73 per share in dividends for 2020 On April 19, 2021 it was stated that Russian company Nizhnekamskneftekhim would pay RUB 0.73 per share, or a total of RUB 1.336 bln, in dividends for 2020, according to a recommendation of the board of directors. RUB 1.176 bln will be paid on common shares, and RUB 160 mln on preferred shares. The annual meeting of the shareholders, which took place on April 16, also approved the company’s results for 2020.

Rusagro to pay USD 139.9 mln in final dividends for 2020 On April 19, 2021 it was disclosed that the shareholders of Russian agricultural holding Rusagro had approved paying USD 139.913 mln in final dividends for 2020 during general meeting of shareholders that was held on April 16. The company had already approved and paid interim dividends for the year ending as of December 31, 2020, in the amount of USD 25,560,956.88. The dividend will amount to USD 1.04 per global depositary receipt (GDR), taking into account that treasury GDRs are excluded from dividend distribution. Rusagro’s dividend policy stipulates that the company should pay at least 25% of its net profit calculated under International Financial Reporting Standards (IFRS) in dividends, and that it should pay dividends twice a year. In December 2020, CEO Maxim Basov said that the company’s management suggested changing the policy and making the company pay at least 50% of the net profit in dividends. The company paid a total of USD 68.605 mln in dividends, including USD 43.05 mln final dividends on 2019 results. The family of control around 71.9% in Rusagro, Basov has a 7.5% stake, and free float is around 20%.

Rostelecom to pay at least RUB 5 per share and raise dividends in 2021–2023 On April 20, 2021 President of Russian state-controlled telecom operator Rostelecom Mikhail Oseyevsky said during the Investor Day that the company plans to pay at least RUB 5 per ordinary share and by at least 5% more than for the previous reporting period under a new dividend strategy for 2021–2023. Oseyevsky

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VTB management to recommend paying 50% of net profit in dividends On April 20, 2021 it was stated during an Investor Day of Russia’s second largest bank VTB that the management of the bank would recommend paying 50% of the bank’s net profit in dividends for 2020 at a meeting of the supervisory board on April 23. The bank will hold an annual general meeting of its shareholders on June 4. Previously, the bank paid RUB 20.1 bln in final dividends for 2019, or only 10% of its net profit for the year as calculated under International Financial Reporting Standards (IFRS). The Federal State Property Management Agency owns 60.93% of the bank’s ordinary shares, while the rest is in free float. The Finance Ministry and the Deposit Insurance Agency (DIA) own all preferred shares of type 1 and type 2, respectively, so the combined government ownership of the bank’s shareholder equity amounts to 92.2%. Preferred shares owned by the Finance Ministry account for 32.88% of the shareholder equity, and the DIA’s preferred shares account for 47.22%.

X5 Retail Group says dividends for 2021 may rise 10% on year On April 20, 2021 CEO of Russian grocery producers Igor Shekhterman said during an online conference that the company can increase dividends for 2021 by 10% on the year to a total of RUB 55 bln. X5 pays dividends twice a year, for January–September and for the entire year. Last year X5 paid dividends of RUB 50 bln. A spokesperson for the company said that the extended dividends may be paid for 2021. Director for the company’s investors relations department Andrei Vasin said that X5 does not plan to change its jurisdiction in the Netherlands yet.

MMK board recommends RUB 1.795 per share in January–March dividends On April 21, 2021 it was stated that the board of directors of Russia’s Magnitogorsk Iron and Works (MMK) had recommended paying RUB 1.795 per share in dividends for January–March. The company did not pay dividends for January–March 2020. Viktor Rashnikov, chairman of the board of directors, holds 84.26% in MMK, while free float accounts for 15.7%.

Lukoil board recommends RUB 213 per share in final 2020 dividends On April 21, 2021 it was reported that the board of directors of Russian oil major had recommended paying RUB 213 per ordinary share, or a total of RUB 147 bln in final dividends for 2020. The record date for the dividends is July 5. The shareholders will consider the recommendation at an annual general meeting on June 24. At the meeting, the shareholders would also consider the possibility of paying dividends in the form of securities in addition to money. The company will continue calculating cash dividends in accordance with the dividend policy, Lukoil said. In October–December 2020, the company paid interim dividends of RUB 32 bln, or RUB 46 per share.

En+ Group board recommends paying no dividends for 2020 On April 22, 2021 it was stated that Russian power company En+ Group had recommended paying no dividends for 2020.

Polyus board recommends RUB 387.15 per share in final 2020 dividends On April 22, 2021 it was stated that the board of directors of Russian gold producer had recommended paying RUB 387.5 per share in final dividends for 2020. The company already paid RUB 240.18 per share in dividends for January–June 2020. The shareholders will consider the recommendation at an annual general meeting on May 27. The record date is June 7. Tycoon Said Kerimov is the core shareholder of Polyus.

NLMK board recommends RUB 7.71 per share in January–March dividends On April 22, 2021 it was stated that the board of directors of Russian steelmaker (NLMK) had recommended paying RUB 7.71 per share, or a total of RUB 46.2 bln, in dividends for January–March. The shareholders will consider the recommendation at a meeting on June 11. The register for the meeting will close on May 17. The record date was set at June 23. NLMK paid RUB 3.21 per share in dividends for January–March 2020. Businessman Vladimir Lisin holds around 81% in NLMK through Fletcher Group.

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Eurobonds / DRs Alfa-Bank cuts Eurobond guidance to 5.626–5.75% On April 19, 2021 it was reported that Russia’s Alfa-Bank had lowered the yield guidance for 10.5-year dollar-denominated subordinated Eurobonds to 5.625–5.75% from 5.875%. Demand for the Eurobonds exceeds USD 520 mln. The bonds will have a 5.5-year call option. The bank already held a conference call with global investors and a series of individual calls with investors. Alfa-Bank and J.P. Morgan will organize the placement.

Sovcomflot sets Eurobond guidance at 3.9% On April 20, 2021 it was reported that Russian shipping company Sovcomflot had set the final guidance for 7-year dollar-denominated Eurobonds at 3.9%, give or take 5 basis points. Investor demand for the Eurobonds exceeds USD 1.5 bln. The initial yield guidance was 4.375%, but the company reduced it to 4.125% during the bookbuilding. The company held an online roadshow for the Eurobonds from April 14 through April 16. Citi, VTB Capital, Alfa-Bank, ING, J.P.Morgan, Sberbank CIB, Societe Generale and UniCredit with act as organizers. Simultaneously, the company plans to buy back up to USD 400 mln of its Eurobonds maturing in 2023 at USD 1,071.25 per each security with a face value of USD 1,000. Sovcomflot placed USD 900 mln of the 7-year bonds in June 2016 with an interest rate of 5.375% annually. Holders of the Eurobonds have submitted securities worth USD 401.6 mln for the buyback. Sovcomflot said it was ready to raise the limit and buy back all the submitted securities.

M.Video-Eldorado cuts guide for RUB 5 bln 2-year bond to 7.25–7.3% On April 20, 2021 it was reported that Russian electronics retailer M.Video–Eldorado cut the first coupon rate guidance for at least RUB 5 bln of 2-year exchange bonds to 7.25–7.3% annually, which corresponds to a 7.38–7.43% annual yield to maturity. The initial guidance was set at 7.3–7.55%. Bids for the bonds are collected on April 20. The bonds will carry semiannual coupons. Alfa-Bank, VTB Capital, Gazprombank, , Russian Agricultural Bank, Sberbank CIB, and Sovcombank are the organizers.

TCS Group to buy back GDRs for up to USD 45 mln On April 21, 2021 it was stated that Russia’s TCS Group plans to buy back up to 700,000 global depositary receipts (GDRs) for a total of up to USD 45 mln. The buyback’ program will last from April 22 to August 31, 2021. The maximum number of GDRs that can be redeemed under the program is 700,000, the aggregate order price should not exceed USD 45 mln.

Please be advised that the information presented in this newsletter is based on the following sources: National Settlement Depository (NSD); Clearstream Banking; Euroclear Bank; PRIME-TASS information agency; “Kommersant”, "Rossiyskaya Gazeta”, “Izvestiya, "Vedomosti”, “The Moscow Times“ newspapers, and others.

For more information kindly contact: Anna Enfiandzhiants Evgenia Makarova Julia Dombrovskaya T +7 (495) 783 13 91 T +7 (495) 783 13 64 T +7 (495) 783 13 15 F +7 (495) 783 13 89 F +7 (495) 783 13 89 F +7 (495) 783 13 20 E [email protected] E [email protected] E [email protected] This document has been prepared exclusively for internal use of VTB Bank (PJSC) customers. The information should not be further distributed or duplicated in whole or in part by any means without the prior written consent of VTB Bank (PJSC). The information contained herein has been prepared on the basis of information which is either publicly available or obtained from a source which VTB Bank (PJSC) believes to be reliable at the time of publication. Information provided herein may be a summary or translation. The content of the material contained herein is subject to change without notice, and such changes could affect its validity. VTB Bank (PJSC) is not obligated to update the material in light of future events. Furthermore, VTB Bank (PJSC) does not warrant, expressly or implicitly, its veracity, accuracy or completeness. VTB Bank (PJSC) and its affiliates accept no liability whatsoever for any use of this communication or any action taken based on or arising from the material contained herein. Additional information may be available upon request. The material in this communication is for information purposes only. Therefore, this communication should not be interpreted as investment, tax or legal advice by VTB Bank (PJSC) or any of its officers, directors, employees or agents and customers should consult with appropriate professional advisers for these specific matters. Nothing expressed or implied herein is intended to create any obligation of VTB Bank (PJSC) and/or impose any liability on VTB Bank (PJSC) and/or create legal relations between VTB Bank (PJSC) and VTB Bank (PJSC) customers.

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