VTB Capital acted as lead manager and bookrunner on the placement of the first Russian infrastructure bonds backed by the 543 km - 684 km section of Moscow - St. Petersburg toll road concession.
NPF VTB Pension fund became the anchor investor in the transaction.
VTB Capital is a stakeholder in the Two Capitals Highway consortium and acts as a financial consultant for the construction, financing and operation of 7 and 8 section of the high-speed M-11 "Moscow - St. Petersburg" road. Two Capitals Highway comprises: Holding VTB Capital IB LLC, VINCI Concessions ServicesRussia SAS, ASTALDI SpA. and IC ICTAS INSAAT.
Two Capitals Highway holds the highest credit rating of A++, and the bond face value and coupon payments are secured by obligations of the Russian Federation under the concession agreement.
The total project investment is estimated at RUB76.8 billion (US$1.43 billion) and will be financed, among others, through a state grant of RUB57.6 billion.
Oleg Pankratov, Head of Infrastructure Capital and Project Finance at VTB Capital, stated:
"Infrastructure investments are one of VTB Capital's strategic business lines. Further developing this line continues to be our priority, and we retain a leading position in the implementation of infrastructure projects through public-private partnerships in Russia. The placement of infrastructure bonds will become an additional source of capital for "Two Capitals Highway" and will ensure that the construction, financing and operation of 7 and 8 section of the high-speed M-11 "Moscow - St. Petersburg" is delivered at the highest standards according to the schedule."
Mikhail Yakunin, Senior VTB Vice President, Head of Financial Subsidiaries Division at VTB Bank, commented:
"This transaction allows NPF VTB Pension Fund to diversify its portfolio, while investing in a reliable, profitable, socially beneficial infrastructure project. A well-balanced investment strategy is instrumental in allowing the fund to effectively manage client accounts and ensure a steady rate of return. Over the period 2008-2014, NPF VTB Pension Fund demonstrated an estimated cumulative yield of 50 per cent".
The Moscow-St Petersburg motorway is a strategically important federal investment project to develop Russia's transport infrastructure. The modern high-speed road is planned as a major thoroughfare linking the two largest cities in Russia.