Sovcombank, a major private bank in Russia, recently closed its first social bond. The issuance of USD 300 million 3.4% loan participation notes due 2025 marks the first ever offering of social bonds by a CIS financial institution. The use of proceeds will be governed by Sovcombank's Social Bond Framework which is based on the guidelines for issuing social bonds published by the International Capital Market Association.
The bond will help boost Sovcombank’s Halva business. The Halva instalment loan portfolio is the bank’s Buy Now Pay Later platform, which gives customers access to financing they would not normally have previously been able to access.
Leading global law firm Baker McKenzie advised a group of 10 investment banks, namely, J.P. Morgan who acted as Global Coordinator, Joint Bookrunner, Joint Social Structuring Agent and Development Finance Structuring Agent, HSBC who acted as Joint Lead Manager, Joint Bookrunner and Joint Social Structuring Agent, and ING, Emirates NBD Capital, Gazprombank, Renaissance Capital, SberCIB, Sova Capital, UniCredit and VTB Capital who acted as Joint Lead Managers and Joint Bookrunners.
Moscow Partner Dmitry Dembich commented on the transaction: “A social bond is still a rarity in the EMEA region, and it was great to demonstrate the team’s expertise in this sector. Being able to work on a first-of-its-kind transaction such as this is a big milestone and it is exactly the kind of deal our multi-jurisdictional team thrives on.”
The cross-border Baker McKenzie team was led by Partners Dmitry Dembich, Roy Pearce and Megan Schellinger, Senior Associates Maxim Khrapov and James Tanner, and Associates Polina Govkelevich and Adil Guseynov.
The deal underlines Baker McKenzie's leading position in advising on ESG-linked financings. Other recent deals include USD 250 million 7.75% covenanted guaranteed green bonds issued by Georgia Global Utilities JSC due 2025 and USD 50 million 6.05% green bonds issued by Akbank due 2024.