WGC-5, a 100% subsidiary of Russia's electricity monopoly Unified Energy System (UES) [RTS: EESR], is one of the seven generating companies formed during the restructuring of Russia's power sector.
The company said that 120 bids were submitted at the auction, and that demand for the bonds exceeded 11 billion rubles ($411 million).
The coupon rate was set at the auction at 7.5% p.a., implying a yield-to-maturity of 7.64% p.a. The second to sixth coupon payments will be at the same rate, while the seventh to tenth will be set later on by the issuer.
The issue has a term of five years, with a coupon period of 182 days. A buyback offer at par will be made three years after the placement date.
The bonds were placed at 100% of par value, at 1,000 rubles.
The placement was organized by Gazprombank, a subsidiary of Russian energy giant Gazprom [GAZP], and KIT Finance, an investment bank.
WGC-5 is planning to use funds raised through the bond placement to refinance its bank loans, build new generating facilities, and modernize and upgrade its fixed assets.
WGC-5 was formed in Yekaterinburg in 2004 on the basis of four power plants, as part of the divestment of the Russian electricity monopoly Unified Energy System's generating assets.
The decision to establish the company was taken by the UES board at a meeting on 3 September 2004.
The company's stock is traded on both MICEX and the RTS.
Deutsche Bank launched a GDR program on the London and Frankfurt exchanges for WGC-5 in September 2005 as a measure to boost the company's capitalization and attract investors.
