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TCS Finance D.A.C. successfully closes U.S.$600 million loan participation notes issuance
Limassol, Cyprus - 21 September 2021 - Tinkoff Bank announces that TCS Finance D.A.C. yesterday successfully closed and issued U.S.$600 million aggregate principal amount of perpetual callable loan participation notes with initial coupon rate of 6% per annum (the "Notes"). The Notes have been issued by, but with limited recourse to, TCS Finance D.A.C. for the sole purpose of financing a subordinated loan to Tinkoff Bank. The Notes have been rated 'B-' by Fitch and 'B3' by Moody's. The Notes were admitted to trading on the Global Exchange Market of the Irish Stock Exchange yesterday.
TCS Finance D.A.C. has on-lent the proceeds from the issue of the Notes to Tinkoff Bank. Tinkoff Bank intends to use the proceeds for general corporate purposes. The issue meets the criteria of Regulation No. 646-P of the Central Bank of Russia (consistent with Basel III requirements) and will be used to strengthen the Bank's capital base.
Sergey Pirogov, Head of Corporate Finance at Tinkoff Bank, said: "We are happy with the outcome of this transaction. A solid order book with nearly 7х oversubscription coupled with a strong mix of investor interest spanning the world is a clear evidence of the strong risk appetite of global investors for unique quality growth stories like Tinkoff. Given its attractive pricing, this AT1 offering will help Tinkoff maintain an optimal capital mix while boosting our capital to fund mid-term growth opportunities ahead of us".
The book building followed a series of debt investor meetings and enjoyed strong investor appetite and a wide geographic distribution, represented by UK (26%), continental Europe (23%), Russia (18%), the Americas (14%), Switzerland (12%), Asia & MENA (7%).
The deal was launched on 8 September 2021, with the initial guidance for the annual coupon rate standing at 6.75%, and was nearly 7 times oversubscribed. The strong investor demand helped the Bank to substantially reduce the indicative coupon guidance over the course of book building. When the book was closed, the demand exceeded U.S.$ 4 billion at its peak, and the final coupon rate was set at 6.0%.
Citigroup Capital Markets and J.P. Morgan Securities acted as Joint Global Coordinators and Bookrunners; AO «ALFA-BANK» (acting jointly with Alfa Capital Markets Ltd), Alfa Capital Markets Ltd (acting jointly with AO «ALFA-BANK»), GPB-Financial Services Ltd, Renaissance Securities (Cyprus) Limited and Société Générale acted as Joint Lead Managers and Bookrunners; and BCP Securities acted as Co-Manager on the transaction.
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About Tinkoff Group
TCS Group Holding PLC is an innovative provider of online retail and SME financial services. It includes Tinkoff Bank, its mobile virtual network operator Tinkoff Mobile, Tinkoff Insurance, its asset management company Tinkoff Capital, Tinkoff Software DC, a network of development hubs in major Russian cities, and Tinkoff Education. The Group is currently developing Tinkoff ecosystem, which offers financial and lifestyle services.
The Group was founded in 2006 by Russian entrepreneur Oleg Tinkov and has been listed on the London Stock Exchange since October 2013.
The Group's key business is Tinkoff Bank, a fully online bank that serves over 16 mn customers and forms the core of the Tinkoff ecosystem. Tinkoff is the 3rd largest retail bank in Russia in terms of active client-base.
Tinkoff Bank is the second largest player in the Russian credit card market, with a share of 14.3%. The 2Q'21 IFRS net profit of TCS Group Holding PLC amounted to RUB 16.1 bn. The ROE was 46.1%.
With no branches, the Group serves all its customers remotely via online channels and a cloud-based call centre. The centre is staffed by over 10,000 employees, making it one of the largest in Europe. To ensure smooth delivery of the Group's products, the Group has a nationwide network of over 10,000 representatives.
Global Finance named Tinkoff Bank the world's Best Consumer Digital Bank in 2020 and 2018, and the Best Consumer Digital Bank in Russia in 2020, 2019, 2018, 2016 and 2015. Tinkoff was also named the Best European Retail Bank of the Year by Retail Banker International in 2020. In 2021, the Banker recognised Tinkoff Bank as Russia's Best-Performing Bank. The bank's mobile app has been consistently praised by local and global independent experts as the best of its kind (in 2013, 2014, 2015, 2016 by Deloitte and in 2018 by Global Finance).
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