OTP Bank closes new successful international bond transactions
OTP participated in two successful international bond transactions in November this year. As part of a syndicate of dominant investment banks in the international bond market, OTP Bank supported as lead manager the issue of international sovereign bonds by the Republic of Albania at a total face value of EUR 650 million. As co-distributor it also participated in the first international EUR 500 million bond issue of MVM Zrt. Including Croatia’s government bond issuance in February, OTP Bank participated in three successful international bond issuance transactions this year, all under the Group-level professional management and coordination of OTP Global Markets headquartered in Budapest.
OTP Bank participated in the sovereign bond issue of the Republic of Albania as lead manager in November this year. On 18 November 2021, the Republic of Albania issued 10-year bonds of a total face value of EUR 650 million with a coupon rate of 3.75%, which is an excellent result for the bond’s current B+ rating. The bond transaction closed with substantial overbidding of over EUR 1 billion.
At the bond auction of MVM Zrt., 6-year corporate bonds of EUR 500 million were issued with OTP Bank’s assistance as co-distributor. The auction closed on 9 November 2022 with investors overbidding the ask price by more than 2.6 times. Maturing on 18 November 2027, the fixed-rate (0.875%) bonds were sold 110 bps above the benchmark yield with a coupon of 1.077%.
The Albanian issue marks the second international government bond issue in 2021 in which OTP Bank participated as lead manager. The first one took place in February, under which the Croatian government offered 12- and 20-year bonds to international investors at a total face value of EUR 2 billion. Despite the volatile market environment, the issue was accompanied by significant overbidding: the total value of the bids amounted to EUR 7 billion.
Both sovereign bond transactions and the corporate bond issue of MVM Zrt. were implemented under the Group-level coordination of the Capital Markets Origination unit of OTP Global Markets, headquartered in Budapest.
‘The success of the international transactions is owing to the collaboration between our colleagues at the Croatian, Albanian, and Budapest headquarters. The trinity of high-level expertise, local market intelligence and successful Group-level cooperation may become a dominant factor for additional market orders in the future,’ commented András Kazár, Head of OTP Bank’s Capital Markets Origination and Securities Services Department.
‘The successful international bond transactions conducted this year also indicate that OTP Group, as a leading banking group in Central and Eastern Europe, has joined the ranks of major bond market players in the region. This confirms that it was a good decision to integrate the capital market issuance activity of OTP Group at Group level and place it under the professional management of OTP Global Markets. Group-level vision combined with local expertise enables us to provide such a level of international cooperation that creates a sound basis for further steps forward in the international bond market,’added Attila Bánfi, Managing Director of OTP Global Markets.