On 25 April 2019, TALAN-FINANCE bonds in the amount of RUB 1 bn were placed at Moscow Exchange. This event became unique for the Russian securities market – for the first time, a government development institution (JSC SME Bank) acted as the key investor in bonds of a company from the SME segment.
The bookrunners of the issue were BCS Global Markets and IFC Solid, the co-arranger was SME Bank. The marketing range of the placement rate was 14.5-15.5% per annum. The final coupon rate was set at 15% per annum. The tenor is 3 years.
Quarterly coupon payments and an amortization repayment scheme are envisaged for the issue: 20% of the par value of the bonds is to be repaid on the end day of coupon period 4, 30% of the par value of the bonds is to be repaid on the end date of coupon period 8. This is the debut issue of TALAN-FINANCE bonds. The issuer TALAN-FINANCE has a ruBB (stable) rating assigned by RAEX (Expert RA).
The placement was in the Growth Sector of Moscow Exchange established for public placement and trading of securities of small- and mid-cap companies.
Alexey Kupriyanov, Head of Debt Capital Markets, BCS Global Markets:
BCS Global Markets actively brings new companies into the market. We conduct a great deal of preliminary work with the issuers to bring them to the public market– the companies issue IFRS reporting, get rated by rating agencies. This is the first experience of cooperation of BCS Global Markets and SME Bank. We see a good prospect in this, and we expect some more transactions this year.
Konstantin Makarov, CEO, TALAN:
Transition of development companies to escrow became an important milestone not only for the construction industry but for the finance sector, too. If previously few large developers used bond placements as an instrument, in the future medium construction companies will also become full-scale players in the capital market. We achieved success thanks to the proactive role of BCS Global Markets, and our experience shows that a stock exchange instrument can be used by numerous construction companies.
Gennady Margolit, Executive Director, Innovations and Investments Market, Moscow Exchange:
The ecosystem of the Growth Sector which is being created and includes a variety of partners and effective support instruments opens access to the capital market for moderate-size Russian companies. We observe a good demand for new securities, including from private investors which acquired nearly half of all bond issues of moderate-size companies last year. Active interaction with development institutions, market participants and regulators will facilitate emergence of new public companies.
Dmitry Golovanov, Chairman of the Management Board, JSC SME Bank:
The strategic goal of JSC SME Bank within the national project “SMEs and support of individual entrepreneurial initiatives” is to provide Russian SMEs with access to financial resources. To fulfil this task, we diversify instruments used to raise funding: they include lending, guarantees, leasing, we plan to launch factoring. At the end of last year, we rolled out a multi-originator platform for securitization of loans extended to SMEs to make lending to this segment more attractive for regional banks and banks with basic licenses. Now we have got another instrument in our portfolio - organization of securities issues for small- and mid-cap companies. For many successfully developing companies, bond issue can become a good alternative to bank lending.
A message from management of BCS Global Markets
The continuously evolving nature of the global coronavirus situation has meant we at BCS Global Markets (BCS) are taking all necessary steps to keep business disruption to an absolute minimum.
Effective from today (Wednesday 18th March) employees from all divisions of the business based in our Russia, UK, USA and Cyprus offices who can work from home without creating any even minor possible risk for business continuity of the Group will be working remotely. It is very much business as usual at BCS. Our employees are equipped with secure access to our systems and will follow their normal working hours, keeping in regular contact with their colleagues and clients.
Despite ongoing disruption caused by COVID-19, we want to also assure you that following a sustained period of positive performance, our capital and liquidity position remains very strong. The business is well-placed to meet any subsequent financial challenges and will continue to go above and beyond for our clients.