Rusal issues exchange-traded bonds, making a strategic move to raise capital

United Company (UC) Rusal, the world's second-largest aluminium company by primary production output, has announced the issuance of non-documentary interest-bearing non-convertible exchange-traded bonds under the BO-001P-14 series. With over 11 million bond pieces, each has a nominal value of RMB 1,000. The firm has set a maturity date of 728 days, which will begin from the start of the bond placements. Is this a strategic financial decision?  

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The firm has issued nearly 11 million bonds, a strategic financial move for raising capital via an open subscription made under the Moscow Exchange. These bonds of the firm have been included under the "Second level" section of Moscow's Exchange list of securities, which is also subject to trading. 

By listing on the Moscow Exchange, the company is assured of higher financial support alongside greater market presence. Additionally, this also creates an investment opportunity for the firm's stakeholders. 

On the same day, the firm had also declared the expiration deadline for its exchange-traded bonds to the potential buyers. This has been mentioned by the firm within its preliminary bond agreement issued to the investor (the potential buyers), including the date of the start of the placement of the Exchange-traded bond. 

These non-documentary interest-bearing non-convertible exchange-traded bonds have been issued by the firm for purchase by its potential buyers in Chinese yuan. Moreover, the interest rate for the first coupon payment is set at 12 per cent per annum and shall be further implemented within the subsequent coupon periods as well. With this strategic move, the firm can attract investments that are particularly keen towards investing in the yuan-dominated securities. 

In order to underwrite the issuance of the non-documentary interest-bearing non, the firm has appointed Gazprombank as the underwriter. This shall aid the organisation to create an impact on delivering the quotations and value of its securities, further strengthening its financial position by offering the stakeholders better investment opportunities. 

Gazprombank, also known as GPB, is a privately owned bank located in Russia. This organisation has been operating since 2014 and offers a full range of services to both legal entities and individuals. Based on the underwriting to be issued by Gazprombank, all the bidders of PJSC Moscow Exchange are required to send applications in order to undertake the purchase of the exchange-traded bonds after the start of the placement. 

Issuing of the Exchange-traded bonds to the investors will significantly create a direct impact on the company's current financial situation and operation. Announcement of the expiration deadline within the preliminary agreement also concludes the purchase and sale of all the bonds, posing a direct impact on the overall value or quotations of its securities. 

Now the question arises — what makes Rusal sell its bond to raise capital? Let's have a closer look at some of its financial structure to have a clearer viewpoint. 

D-o-D stock price analysis (From May 12 to 15, 2025) 

As of May 15, 2025, the share price of the firm is recorded at RUB 33.475 (USD 0.4151), showing a downward trend from the opening price which was at RUB 33.580 (USD 0.4164) the last price for the previous day. On the same day, the stock price is estimated to be at RUB 33.920 (USD 0.4216), and the lowest will be RUB 33.420 (USD 0.4144). 

When the market opened on May 12, 2025, the stock price opened at RUB 34.185 (USD 0.4239), showing an upward trend which changed on May 13, 2025, when the price fell to RUB 33.920 (USD 0.4206).

W-o-W stock price analysis (From April 06 to May 11, 2025)

Looking into April 6, 2025, the firm's stock price had shown a downward trend where each stock was priced at RUB 33.765 (USD 0.4187). The following week, the stock price further fell to RUB 33.280 (USD 0.4127) but rose in the subsequent week, where the price touched RUB 35.140 (USD 0.4357). 

Nonetheless, the fluctuation of the stock price prevailed in the following week as well, when the price again fell to RUB 32.520 (USD 0.4032). However, the price again made a breakthrough with the start of May, where the stock price W-o-W showed an increase.