Bank of St Petersburg plans bond issue

ST PETERSBURG, Russia, April 19 Thu Apr 19, 2012 12:37pm EDT

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ST PETERSBURG, Russia, April 19 (Reuters) - Bank of St Petersburg is planning to sell a bond but thinks interest rates are too high to raise a substantial sum, the chairman of the lender's supervisory board, Indrek Neivelt, said on Thursday.

"We are happy to go to the market but not (for) a big amount. Russian corporate bond yields are too high," he said.

A financial source told Reuters earlier this week Bank of St Petersburg will meet investors from April 19 to discuss a possible Eurobond issue.

Neivelt confirmed a roadshow would take place, but declined to give further details.

Russian banks and companies are interested in borrowing abroad while foreign investors are in the market for Russian debt after the finance ministry placed three benchmark Eurobond tranches worth $7 billion in late March.

Speaking to investors invited to the bank by fund manager East Capital, Neivelt said Bank of St Petersburg was targeting organic growth of 15 percent per year.

The bank, which is part owned by the European Bank for Reconstruction and Development (EBRD), is the 16th-largest in Russia.

East Capital fund manager Aivaras Abromavicius described it as an obvious acquisition target, but Neivelt insisted the bank was not for sale. (Reporting By John Bowker; Editing by Erica Billingham)

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