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November 13, 2012

Deutsche Bank arranged the largest and the most successful Russian deals on capital markets in 2012

Deutsche Bank arranged the largest and the most successful Russian deals on capital markets in 2012

Deutsche Bank CIB continues to demonstrate significant successes in Russia anchored in the strength of its investment banking platform globally and in the region. Since the beginning of 2012 in the whole spectrum of high profile equity capital markets, debt capital markets and advisory mandates Deutsche Bank shows significant results confirming its position as the leading international investment bank in the region.

Deutsche Bank’s Russian Equity Capital Markets franchise has demonstrated an outstanding performance in 2011-2012 by completing the largest Russian IPOs. Deutsche became the only bank which successfully priced all its launched equity offerings while many ECM deals in the region were pulled. Furthermore, Deutsche Bank is the only bookrunner which achieved success in placing all 4 major ECM products in the region (IPO, fully marketed offering, ABB, convertible bond placement).

Despite volatile market environment in 2012 Deutsche Bank has successfully completed 6 out of Top-10 Russian ECM transactions of Russian companies, namely US$520m Globaltrans fully marketed follow-on offering, US$94m Yandex block trade, US$475m Severstal convertible bonds issue, US$146m M.Video block trade, US$311m MD Medical Group IPO and US$200m Globaltrans block trade.

“Russian equity market has rallied since mid-May driven by positive macro decisions by European Central Bank and Federal Reserve System, volatility decrease in the global markets and oil price growth as well as ruble appreciation” commented on market conditions Andrew Chulack, Co-head of Global Banking Russia and CIS.

The latest and the largest in the last 12 months IPO that Deutshce’s team has successfully arranged is a US$311m IPO of MD Medical Group – a medical holding which owns “Mat’ i Ditya” medical clinics. The IPO represents a novel story for the Russian market as the first public Russian hospital operator. Despite challenging market conditions at the time of placement, the transaction found strong support by institutional international and local investors resulting in the book being more than 2.5 times covered at the end of the bookbuild.

Besides, Deutsche Bank Russia has been involved in some of the largest and complex M&A transactions this year being a prominent M&A advisor on 7 landmark transactions in Russia over the last year. Landmark M&A mandates in 2012 included advising Sberbank on its USD3.6bn acquisition of Turkish DenizBank – the largest cross-border acquisition by Russian bank, advising TeliaSonera on its USD10.1bn shareholders agreement on dividend payment and sale of shares in MegaFon – the landmark cross-border M&A transaction in the telecommunication sector, advising Globaltrans on its USD540m acquisition of Metalloinvesttrans from Metalloinvest – the first Russian large scale M&A deal between a private freight rail group and natural resource company, advising UCL Holding on its USD4.1bn strategic acquisition of a 75% stake in Freight One JSC – the largest M&A transaction in the Russian transportation industry transforming UCL into a national champion, advising on EUR222mn sale of Voronezh and Kirov tyre plants by Sibur to a consortium of Pirelli/Russian Technologies/Fleming – the landmark cross-border strategic deal for the whole Russian tyre market, advising and issuing GDR to Severstal on its USD2.8bn separation of Nord Gold from Severstal through Share Exchange Offer – an innovative transaction structure whereby the separation of Nord Gold is executed through the share exchange offer allowing to resolve complexities associated with other spin-off structures.

Daniel Jacobowitz, Co-head of Global Banking Russia and CIS comments on the latest announced transaction – US$3.6bn Sberbank acquisition of Denizbank: “We are proud to be a long-term advising partner for Sberbank – Europe’s 4th largest bank by market capitalization which is US$63bn at the moment. We are glad that we have advised on the latest Sberbank acquisition which represents the largest Russia & CIS and the largest cross-boarder EMEA financial services acquisition year-to-date 2012. This transaction also ranks as Sberbank’s largest international acquisition in its 170 year history. Denizbank is the sixth (by assets as of H1 2012) among privately-owned banks in Turkey. Most notably, the acquisition establishes Sberbank as a leading player in the central and southern European banking markets and as a leading European bank with a branch footprint in some of Europe's markets with the highest growth and returns”.

On Debt Capital Markets side Deutsche completed 6 significant issuances of sovereign, financial institutions and corporates’ bonds. Russian Federation US$7bn Multi-tranche bond offering arranged by Deutsche Bank in March 2012 became the largest ever international transaction by the Russian Federation and the largest EM sovereign bond deal since 2009 seeing demand of approximately US$25bn in investor orders. Among other deals on debt markets are AFK Sistema US$500m senior notes placed to more than 100 investors from around the globe, VEB US$1bn senior unsecured notes which attracted strong investor demand and were oversubscribed final orderbook which allowed the deal to be priced substantially below initial guidance, Russian Agricultural Bank RUB10bn tap of existing senior unsecured notes, and the latest deal – one of the most profitable and leading steel companies in the world NLMK has successfully placed Debut US$500mn senior unsecured notes.

Therefore Deutsche Bank has once again affirmed its market leading position due to the winning combination of the Bank’s strong client relationships fully complemented by the best-in-class Russian equity and debt capital markets capabilities alongside track record and team continuity.

Deustche Bank Russia issuance pipeline remains strong and we expect a number of high quality names to tap the market in H2 2012 and H1 2013.



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