MOSCOW, Oct 5 (Reuters) - Promsvyazbank, Russia’s tenth largest lender by assets, bought back $450 million worth of its subordinated Eurobonds from the market in September, the head of the bank’s financial markets unit said on Thursday.
Promsvyazbank, also known as PSB, said late last month it had bought back part of its subordinated Eurobond issue maturing in 2019, but did not say how much it spent on the buyback.
PSB, controlled by businessmen Alexei and Dmitry Ananyev, said at the time it was buying back the bonds to reduce debt servicing costs after it raised $500 million in a new perpetual subordinated debt in July.
Some Russian subordinated Eurobonds have come under pressure since the central bank in August had to rescue Otkritie, once Russia’s largest private bank.
In comments provided by PSB’s press service, financial markets head Dmitry Ivanov said on Thursday the bank would continue periodically buying back its instruments from the market below their nominal price.
“Besides that the bank is getting profit from these deals, a reduction in the volume of papers (bonds) in circulation contributes to the stabilisation of quotes for papers (bonds) still on the market, and increases investors’ trust,” he said.
“The bond purchases do not have a significant impact on the bank’s capital because these are papers (bonds) with short maturities,” he said. (Reporting by Kira Zavyalova; Writing by Jack Stubbs; Editing by Andrey Ostroukh and Jane Merriman)