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Project Name: The Chuvash Republic |
Country: Russian Federation
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Highlights:
- RUR 1 billion (US$34.7mn equivalent) 5 year bond issued by the Chuvash Republic to finance its capital expenditure program
- An IFC partial credit guarantee helped achieve a Moody’s international scale Ba2 rating and Aa2.ru local scale rating, one level above the Chuvash Republic’s standalone rating.
- First subnational bond in Russia with a third party guarantee
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About the Republic:
The Chuvash Republic is one of 86 Russian regional governments with a population of 1.3 million people and gross regional product RUR 76.6 billion in 2005 ($2.7 billion equivalent). The Republic is one of the more progressive regional governments in Russia. |
Financing objective:
The proceeds of the 2006 bond are used to finance the Republic’s capital expenditure program, which mainly includes investments in rural water supply and roads. |
The structure of the project :
The 5 year unsecured bullet RUR 1.0 billion bond was issued in June 2006 with a fixed coupon of 7.85%. The IFC guarantee covers a RUR amount up to 23% of the outstanding principal of the bond (initially RUR 230 million). |
The outcome:
The IFC guarantee supported the Republic’s effort to access longer term funding for basic infrastructure improvement. |
