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. Last Updated: 07/27/2016

Demand High for Alfa Bonds

LONDON -- Russia's largest privately owned bank, Alfa Bank, drew more demand than initially expected for its new borrowing Tuesday, offering $175 million of three-year bonds at a yield of 10.95 percent.

The bond, which was originally expected to be $150 million in size, was lead managed UBS Warburg and Merrill Lynch said. Officials from Alfa Bank visited investors in London, Germany and Switzerland last week to sell the bond.

The tour generated close to $300 million of investor orders, according to an official from UBS Warburg.

"It is a bank that has managed to be a survivor of the Russian crisis. They never defaulted and it gives some diversification in the Russian universe," said a fund manager in France.

Alfa Bank sold an international bond in 1997 and repaid it in full in 2000, despite the painful devaluation and domestic debt default in August 1998.

Since last year, when the Moscow city government came to market with the first new bond since August 1998, a slew of Russian borrowers has come to international bond markets, although the government itself has stayed away.

The majority of the new issues have risen in price, taking their cue from price gains in the Russian sovereign debt, most of which was issued prior to the crisis.

Alfa Bank is rated B- by Standard and Poor's, B1 by Moody's Investors Services and B by Fitch Ratings. Russia is rated BB- by S&P, Ba3 by Moody's and BB- by Fitch.