Debevoise and Linklaters win roles on Russian metal group’s $1bn Eurobond offering

Debevoise & Plimpton, Linklaters and Irish firm Arthur Cox have won roles in the placement of a $1bn (£621.6m) seven-year Eurobond with an annual coupon rate of 5.55 per cent by Russian metals giant Norilsk Nickel.

The deal, which closed yesterday (28 October), is the first debt instrument issued by the company under Rule 144A/Reg S which makes it eligible for qualified US investors.

“It’s the first time in nearly a decade that Norilsk has offered a debt instrument to investors in the US,” said Debevoise & Plimpton partner Alan Kartashkin, who was one of the lead partners advising the metals producer. “It’s a truly global offering.”

This latest transaction was launched on the back of a similar placement in April 2013, when the same legal line-up advised on Norilsk Nickel’s $750m (£466.2m) five-year offering with an annual coupon rate of 4.375 per cent – the largest ever Eurobond transaction by a Russian or CIS non-state owned company made in a deal excluding the US.

“At $750m, it was a large bond offered purely to non-US investors,” continued Kartashkin. “The value was unusually large to do that kind of deal.”

The company aims to use the proceeds from its latest issue for general corporate purposes and further capital investments.

“This offering highlights the huge interest of global investors in Russian issuers this year. They’ve had huge success in Eurobond markets,” said Kartashkin. He added that this is particularly notable given challenging market conditions.

Norilsk Nickel is a longstanding client of Debevoise. However, the firm has also advised on a flurry of other Eurobond issuances in the region in recent months, for corporations including Rusia’s largest gold producer Polyus Gold and potash fertiliser company OJSC Uralkali.

The Debevoise team advising the metals giant was led by corporate finance partner Kartashkin, alongside London-based corporate partner James Scoville and finance partner Peter Hockless. They were assisted by Moscow associates Dmitry Karamyslov, Robert Manson and Timur Ochkhaev.

Linklaters advised the banks – Bank of America Merrill Lynch, Barclays, Citigroup, Societe Generale and Sberbank CIB – on the offering. The team included the head of the firm’s global US securities and corporate practice Cecil Quillen, partner Jasper Evans and associate Robert Ludwig. The Moscow team included capital markets partner Andrew Burge, partner Dmitry Dobatkin, counsel Simon Few and associate Vladimir Gogokhia.

Arthur Cox acted as Irish counsel to the issuer, led by capital markets partner Glenn Butt.

For more on Russian debt capital markets, see our special report, Market force.