Gazprom sees strong demand for £850m sterling bond sale – despite Brexit

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Gazprom sold an £850m seven-year corporate bond Wednesday, following sales of dollar, euro and swiss franc debt this year as the Russian state-backed energy group took advantage of favourable market conditions to diversify its sources of funding.

The bond, one of the largest ever to be issued in sterling by an emerging market company, is the latest sign of investors’ lack of concern about the Brexit process. The sale comes on the same day that Theresa May’s government delivered official notification of the UK’s intention to leave the EU.

Gazprom’s bond is rated sub-investment grade and is expected to price at a 4.25 per cent coupon, after orders for £1.6bn of paper were received from more than 150 investors, according to bankers working on the deal.

The interest rate compares to a 5.34 per cent coupon on a £500m, seven-year Gazprom bond sold in 2013, and the 6.5 per cent paid on an £800m issue in 2007, which a banker on the deal said was the previous record holder for a single-tranche emerging market sterling corporate bond.

Gazprom, which does not have large sterling needs, has said it will swap the proceeds into euros and hedge its exposure to the UK currency.

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