Metalloinvest (the "Company"), a leading manufacturer and supplier of iron ore products and hot-briquetted iron on the world market, one of the regional producers of high-quality steel, announces the closure of the application book for the placement of the first climate transition bonds on the Russian debt market by open subscription for a total amount of 10 billion rubles. with a circulation period of 1.5 years.
According to the results of book building, the final coupon was set at the key rate of the Bank of Russia (CB) + 2.5 percentage points, which is 25 bps lower than the level at the time of opening the order book. A variable monthly coupon is provided for the issue, which is defined as the amount of income for each day of the coupon period based on the CS plus spread. The technical placement on the Moscow Stock Exchange is scheduled for December 24, 2024. ACRA rating agency assigned the issue the highest possible expected credit rating of EAA(RU).
Climate transition bonds require the issuer to have a scientifically sound strategy[1]
change their activities to transition to a low-carbon economy and prevent climate change. Metalloinvest's issue has been verified by ACRA[2], confirming compliance with the Guidelines on Financing the Transition to a Low-Carbon Economy published by the International Capital Markets Association (ICMA). The Agency also confirmed the compliance of the issue with the regulation of the Bank of Russia dated 12/19/2019
No. 706-P "On Securities Issue Standards" (regarding the requirements of Chapter 69.2). The issue is planned to be included in the sustainable development sector of the Moscow Stock Exchange.
The company aims to reduce the total specific greenhouse gas emissions by coverage 1, 2 and 3 per ton of iron ore concentrate in the range of 0.1 – 2.0% by 2025 relative to the base year 2023.
Alexey Voronov, Deputy General Director for Finance and Economics of the Company, commented:
"Metalloinvest has once again become a pioneer in the green finance market, becoming the first issuer in the Russian market to issue climate transition bonds. This is the third financial instrument of the Company linked to the results of ESG activities. So, in 2019, a credit line was opened, the interest rate on which was linked to the level of the Company's ESG rating. In the same year, Metalloinvest became the first Russian borrower in the ferrous metallurgy to link a pre-export loan to sustainable development goals. Our mission is to be the basis for the evolution of modern metallurgy for future generations, and we continue to work systematically in this direction."
The company pays special attention to sustainable development, disclosing non-financial results of its activities for more than ten years. Metalloinvest firmly holds a leading position in ESG ratings and rankings – in 2024, the Company became the leader of the RSPP ESG index for the 11th year in a row and was recognized as the flagship of Russian business in the field of sustainable development.
Comments of the participants of the transaction:
Denis Shulakov, First Vice President of Gazprombank:
"The debut issue of climate transition bonds is placed in an extremely difficult market environment in Russia. But, it took place, i.e. it was accepted and supported by the market. Investor demand exceeded the maximum declared volume of output, which allowed the rate to be reduced by 25 basis points. At the same time, the Issuer actually managed to achieve a narrowing of the spread compared to current market transactions. The bond issue underlines the Issuer's commitment to the climate agenda, as the format requires the company to have a scientifically sound climate strategy and targets for reducing climate impacts. The issue will also be the first to include the Sustainable Development Sector of the Moscow Exchange in the Segment of bonds related to Sustainable Development Goals."
Maria Khabarova, Managing Director, Head of the Investment Banking Department of VTB Bank:
"The placement of the first climate bond issue in the history of the Russian debt market was implemented in conditions of deteriorating market conditions and on the eve of the meeting of the Bank of Russia on PREP. Despite the difficulties, we managed to reduce the spread to the CS from an indicative 275 bps to a final 250 bps. Various groups of institutional investors and individuals participated in the issue, whose participation rate was about 7% of the loan, which is quite a lot in the current realities of the market with its high deposit rates."
Dmitry Taskin, Director of Primary Bond Market Development at the Moscow Stock Exchange:
"We are pleased to welcome the first issue of climate transition bonds of Metalloinvest HC in Russia. For the Moscow Exchange, the development of the Sustainable Development Sector is one of the priorities. The expansion of the ESG toolkit due to the emergence of a new type of securities, climate transition bonds, will enable issuers to attract financing on the exchange for the purpose of implementing their energy transition strategies and projects with a positive impact on the environment. The development of the exchange market for decarbonization and climate change prevention tools will contribute to the implementation of state tasks provided for by the Climate Doctrine of the Russian Federation and the Strategy for Socio-Economic Development of the Russian Federation with Low Greenhouse Gas Emissions until 2050."
