Yield of the Gazprombank JSC BO-17 bond for today: quotes RU000A0ZYEE5 + NCD and reviews

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Conservative investors will certainly be interested in bonds of the energy corporation Gazprom, the largest exporter of oil and gas. The company has established itself as a borrower with an impeccable reputation, having not committed any delays or technical default. But some planned issues are being postponed - the company does not need new loans.

For example, the price chart for Gazprom BO-17 bonds cannot be found on the Internet, just as one cannot find information in official sources about past coupon payments of this series. Be careful: this issue can easily be confused with the Gazprombank GPB BO-17 loan, which is traded on the stock exchange at a price of 102.6%.

Bond parameters

How much will banks earn on support?

Typically, banks make money on commissions for maintaining contracts, explains Vladimir Teterin, senior director for banking ratings at Expert RA. But Gazprombank works for a nominal fee, “virtually free,” assures one of RBC’s interlocutors.

In addition to the commission, the bank will receive additional liabilities and, accordingly, will be able to earn money on them: contractors and suppliers will keep contract balances in its accounts, says Fitch analyst Anton Lopatin. As of January 1, the total volume of GPB deposits was about 5.2 trillion rubles, he points out.

Gazprombank is supporting Gazprom’s contracts for 262.5 billion rubles. - this figure was published on the bank’s electronic trading platform website. After RBC’s request to the bank’s press service, this information was removed from the site. The current amount is higher, notes one of RBC’s sources. According to another interlocutor, the volume of support contracts is “approaching 500 billion rubles.” Representatives of Gazprombank and Gazprom refused to comment on this.

Another potential source of income for banks is profit from cross-selling additional services to new clients, Teterin says. Analysts found it difficult to calculate how much Gazprombank could earn from support, but, according to Teterin, “profits could grow by billions.”

Bond quotes

Who will look after 1 trillion rubles.

Gazprom does not limit the number of banks to control investments.
“We are open to suggestions,” his representative assured RBC. But Gazprombank has already begun supporting gas contracts (the monopoly has 46% of its shares). “We were the first to conclude an agreement for the service (...) and, naturally, we will make every effort to maintain leadership in this area,” a bank representative told RBC. Read on RBC Pro

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Another supporter of the contracts is Rossiya Bank, an RBC source close to the Gazprom group knows. The cooperation is already reflected in the bank’s report for 2021: at least one of the subsidiaries of Gazprom Mezhregiongaz ordered contract support. But, most likely, Rossiya’s share [in banking support services] will be small - the bank now has only a few projects with Gazprom Mezhregiongaz, says another RBC source close to Gazprom.

“Russia” is the bank of Yuri Kovalchuk and the bank’s top managers (the bank does not disclose the shareholder scheme on the Central Bank website), for example, President Vladimir Putin and the head of Chechnya Ramzan Kadyrov keep money in the bank. Rossiya is historically close to Gazprom Mezhregiongaz: in 2010, a subsidiary of Mezhregiongaz joined the bank, since then Kirill Seleznev (headed Gazprom Mezhregiongaz until the spring of 2021) has been on the board of directors of Rossiya. The company has bank accounts and has salary projects.

Sberbank, which finances many of the monopoly’s contractors, also wants to join in monitoring Gazprom’s construction projects, two people close to both sides told RBC. “One bank is unlikely to have enough resources to service all contracts, and it is not clear how to provide support to Gazprombank if the contractor’s creditors are different,” says one of the interlocutors. But, according to him, for now Sberbank is “only looking” for gas projects where “support can be piloted.”

RBC sent inquiries to ten largest banks. A Sberbank representative said that the organization is “actively developing banking support and discussing its implementation with key clients.” Representatives of VTB and Raiffeisenbank declined to comment; the rest, including Rossiya Bank, did not respond to RBC’s requests.

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How much will Gazprom save?

Gazprombank and Gazprom refused to tell RBC the amount of inappropriate expenses that were blocked by the beginning of 2021. But, for example, in 2017–2018, the bank received applications for the transfer of 24.5 billion rubles, and rejected approximately 20% (5.5 billion rubles). The main reason: absence or incomplete set of supporting documents. At the same time, applications for 545 million rubles. were recognized as inappropriate expenses. These are figures from a Gazprombank presentation that was posted on the bank’s electronic trading platform website, but disappeared after RBC’s request. Over the past six months, the bank has blocked transfers of approximately another 1 billion rubles, says a RBC source close to Gazprom.

The introduction of control, as one of RBC’s interlocutors says, made it possible to block, for example, an attempt to transfer a bonus to the top management of one of the contractors immediately after receiving the first funds from the gas monopoly under a contract, long before the completion of the work. Coordination of transactions also turned out to be problematic for Gazstroyprom, according to two sources close to Gazprom and the contractor. “We have all targeted expenses,” says a source at Gazstroyprom. “But Gazprombank did not include in its special register of companies (those that can transfer funds to special accounts) the production and service structures of Gazstroyprom, so the company cannot pay some counterparties.” As another RBC source explains, Gazstroyprom has “too many companies,” the structure of relationships between which is not fully clear to either Gazprom or the bank. “Gazprom monitors the timeliness of transfers of funds and has not yet identified cases of violation of established deadlines,” a representative of the monopoly commented to RBC on possible problems of contractors.

Other issues of the issuer

Why does Gazprom need cost control?

Misuse of funds by Gazprom contractors and the organization of illegal schemes with the participation of top managers of the company itself have repeatedly led to legal proceedings and criminal cases.
For example, in 2015, Gazprom Invest accepted from a contractor a gas pipeline to Priozersk, 125 km long and costing almost 2 billion rubles. Fontanka journalists tried to find the gas pipeline, but found only a small part of it (40 km), and instead of the rest of the pipe, there was an empty clearing. A criminal case was opened. In 2012, Gazprom managers used a chain of shell companies to inflate the cost of Weatherford equipment for the Gazprom Dobycha Nadym project by 12 times (up to 356 million rubles), and then receive an increased VAT deduction, the Arbitration Court indicated in its decision Moscow court. The money was withdrawn by “transfer to offshore jurisdictions or cash withdrawal.” The same schemes were used when supplying equipment from France, Austria and Germany, the court indicated.

ACRA assigned the bond issue of Bank GPB (JSC) BO-15 (RU000A0ZYHK5) a credit rating of AA(RU)

(C) 2021

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