SSEECCUURRIIITTIIIEESS MMAARRKKEETT NNEEWWSSLLEETTTTEERR weekly Presented by: VTB Bank, Custody January 21, 2021 Issue No. 2021/02 Market News Finance Ministry fully places RUB 20 bln OFZ bonds On January 20, 2021 Russia’s Finance Ministry said in a statement that it hd fully placed RUB 20 bln of OFZ 26234 bonds with a fixed coupon maturing in July 2025 at an auction on January 20. The cut-off rate amounted to 96.0801% and the weighted average rate stood at 96.162%. The cut-off yield stood at 5.57% and the weighted average yield at 5.55%. Demand for the bonds totaled RUB 38.97 bln. Company News Rosseti terminates CEO Livinsky, appoints Lenenergo CEO Ryumin On January 16, 2021 it was disclosed by reporters that Russian state power grid holding Rosseti had terminated powers of CEO Pavel Livinsky ahead of schedule, and appointed Andrei Ryumin, CEO of the company’s subsidiary Rosseti Lenenergo, as the company’s acting CEO. In its turn, the board of directors of Rosseti Lenenergo has terminated the powers of Ryumin ahead of schedule and appointed Chief Engineer Igor Kyuzmin as the company’s acting CEO. Livinsky was elected as the CEO of Rosseti in September 2017. Earlier in January, Kommersant business daily reported quoting sources that the government may appoint Livinsky as a head of an energy department that would be created in the framework of an administrative reform. Cherkizovo Group board again approves offering of 10.3 mln shares On January 17, 2021 it was stated that the board of directors of Russian meat producer Cherkizovo Group had again approved a public offering of 10.262 mln additional shares at a meeting that had took place on January 16. The par value of the shares is 1 kopeck each. The offering was first approved on December 18. VEON appoints Internet investor Boguslavsky as board director On January 17, 2021 it was stated that Amsterdam-based VEON, the sole owner of Russian mobile operator VimpelCom, had appointed Leonid Boguslavsky to the group’s board of directors, following the departure of Mariano de Beer, who had stepped down in December 2020. Boguslavsky is the founder of RTP Global, an early-stage venture capital firm with a strong track record of investing in technology, and is considered a pioneer of IT and Internet tech investment. As an investor, he is involved with some of the world’s most successful companies, including Yandex, Ozon, Delivery Hero, RingCentral, EPAM and Datadog among many others. Prior to becoming a venture capitalist, Boguslavsky was a managing partner of PwC Management Consulting Services. Sistema prepares Segezha Group for IPO in 2021 if market allows On January 18, 2021 it was stated that Russian multi-industry holding Sistema was preparing its subsidiary pulp and paper holding Segezha Group for a possible initial public offering (IPO) in 2021 if the market conditions are favorable. In November 2020, Sistema President Vladimir Chirakhov said that Segezha was the next asset of Sistema that was ready for an IPO. Segezha Group’s revenue rose by 38% on the year to RUB 18.966 bln in July–September 2020, with adjusted operating income before depreciation and amortization (OIBDA) doubling to RUB 5.079 bln and the OIBDA margin rising to 26.8% from 18% in the same period of 2019. 1 Sollers buys back all planned 1.713 mln shares from market On January 18, 2021 it was stated that Russian carmaker Sollers of businessman Vadim Shvetsov had bought back all the planned 1.713 mln shares, or 5% of the charter capital, from the market. The transaction took place on January 15. Qiwi says shuts Rocketbank on April 1, move accounts to Qiwi Bank On January 19, 2021 a spokesperson of Russian payment system operator Qiwi told reporters that the company had terminated work of its online bank Rocketbank and had warned clients that all open accounts would be moved to Qiwi Bank from April 1. The spokesperson said that the company was completing the process of winding up Rocketbank transactions, which started in March 2020. Deposit owners can get their money back early with the interest paid for the actual deposit period and the opened accounts will move to Qiwi Bank. Sovcombank acquires Russian subsidiary of insurer MetLife On January 19, 2021 a representative of Sovcombank told reporters that the bank had closed an acquisition of a Russian subsidiary of international insurance company MetLif, without disclosing the sum of the deal. He said that Sovcombank and MetLife, Inc., one of the world’s largest insurance companies, had signed a binding agreement on December 2, 2020. After receiving approvals from the Federal Antimonopoly Service and the Bank of Russia, the deal was closed on January 19, 2021. Sovcombank plans to rename the company into Sovcombank Life and change the website’s domain name to www.sovcomlife.ru. Zhanna Goncharova, who has been a top executive of MetLife for several years, will become the president of the insurer, while Igor Lappi, CEO of Sovcombank Insurance, will become chairman of the board of directors of the new insurer. MetLife has been operating in Russia since 1994, and in January–September 2020 collected RUB 4.5 bln of premiums. In February 2020, Sovcombank acquired Liberty Insurance, a Russian unit of U.S. company Liberty Mutual Group, and renamed it into Sovcombank Insurance. Executive says Magnit won't launch quarterly dividends or buyback shares On January 19, 2021 Director for Investor Relations of Russian retailer Magnit Albert Avetikov said that the retailer was not considering switching to quarterly dividends or buying back shares. He mentioned that opportunity of quarterly dividend launch had been neither considered with the shareholders nor discussed with the board of directors. Avetikov assured that in case anything occurs in this respect, they will of course, inform the market. Speaking about the buyback program, he said that the issue was not on the agenda. Magnit pays dividends for nine months and a year but according to the dividend policy, the company may announce dividends for January–March, January–June, January–September and a full year. Rosbank’s board approves RUB 60 bln exchange bond program On January 19, 2021 it was stated that the board of directors of Rosbank, a Russian unit of Societe Generale, had approved a RUB 60 bln exchange bond program. The program is open-ended, and the maximum maturity of the bonds slightly exceeds 20 years. Investor says Cian mulls 2022 IPO to value at USD 1 bln On January 21, 2021 Dmitry Kryukov, a partner of investment fund Elbrus Capital, a co-owner of Russia’s largest online real estate classifieds resource Cian.ru told Bloomberg that Cian might consider an initial public offering (IPO) in USD in 2022. Cian may be valued at USD 1 bln soon, Kryukov said. Elbrus Capital and Goldman Sachs own Cian as well as online recruiting service HeadHunter. Sberbank to offer RUB 55 bln of subordinated bonds On January 21, 2021 a financial source told reporters that Russia’s biggest lender Sberbank had set the volume of 10-year subordinated bond offering at RUB 55 bln rubles. The bank collected bids for at least RUB 10 bln of subordinated bonds from January 11. The final coupon guidance amounts to 7%, which corresponds to a yield of 7.12% to a 5-year buyback offer. The bonds will be offered privately among qualified investors. The technical placement is preliminarily scheduled for January 22. Eurobonds / DRs Gazprom board approves offering EUR 6 bln Eurobonds in 2021 On January 15, 2021 it was stated that the board of directors of Russian gas giant Gazprom had approved offering up to EUR 6 bln of Eurobonds in 2021 or its equivalent in another currency with a maturity of each of the loans at least three years. 2 Demand for Gazprom’s 8-year Eurobonds exceeds USD 4 bln On January 20, 2021 it was stated that Russian gas giant Gazprom had placed USD 2 bln 8-year Eurobonds at 2.95%. On January 21 Denis Shulakov, first vice president of Gazprombank, one of the placement’s organizers, told reporters that Investor demand for the Eurobonds exceeded USD 4 bln. At the peak of demand, the bidding book reached more than US 4 bln, including 250 accounts. Shulakov said that foreign investors accounted for more than 75% of the bidding book, including investors from the U.S, the U.K., Switzerland, and other countries of Europe, Asia, and the Middle East. The bids were highly diversified by type and geography of investors. With its new successful placement, Gazprom has set a record low coupon for its own Eurobonds and for the Eurobonds of Russian issuers in general with maturity of over 5 years. It was mentioned specifically that Gazprom placed the paper a premium for the new issue in spite of the issue’s amount of USD 2 bln, which is comparable to the issues of other largest international oil and gas companies. Sovcombank to offer USD 300 mln Eurobonds at 3.4–3.5% On January 19, 2021 it was stated that Russia’s Sovcombank had fixed the volume of social Eurobonds maturing in January 2025 at USD 300 mln and set the final yield guidance at 3.4–3.5%. Investor demand for the Eurobonds exceeded USD 850 mln. The initial yield guidance amounted to 3.75– 3.875% and was earlier lowered to 3.625%. J.P. Morgan, Emirates NBD Capital, Gazprombank, HSBC, ING, Renaissance Capital, Sberbank CIB, Sova Capital, UniCredit and VTB Capital are the organizers. Domodedovo to buy back Eurobonds maturing in 2021, 2023 On January 20, 2021 it was disclosed that Moscow’s Domodedovo airport planned to buy back the Eurobonds maturing in 2021 and 2023.