PhosAgro (Moscow Exchange, LSE: PHOR), a global leader in the production of environmentally friendly phosphate-based fertilizers, has successfully completed a landmark transaction in the Russian debt capital market. On 24 June 2025, the company finalized the book-building process for an additional placement of its BO-02-03 series foreign currency bonds, marking a significant step in its long-term financial strategy.
The offering, conducted in the Russian domestic market, resulted in the placement of bonds at 102.00% of their nominal value, securing an equivalent of USD 400 million in funding for the company. This pricing translates to an implied annual coupon rate of 6.53%, which, according to market analysts, represents the lowest implied coupon achieved for any foreign currency bond issue in Russia’s primary debt market since the beginning of 2025.
PhosAgro’s success with this bond issuance reflects the company’s robust financial position, its strategic approach to capital markets, and the sustained trust it enjoys among domestic and international investors alike.
Strong Investor Demand Drives Up Pricing
The bond issuance attracted strong interest from the investment community. More than 30 separate orders were submitted by a broad base of institutional investors, private banks, and brokerage platforms. The strong demand prompted PhosAgro and its advisors to revise the initial pricing guidance upward by 100 basis points, ultimately setting the placement price above par at 102.00% of the nominal value.
The successful book build highlights the growing appetite among Russian and foreign investors for high-quality corporate debt instruments, particularly from companies with a proven track record of financial discipline and strategic growth.
The official settlement and additional placement of the BO-02-03 bonds is scheduled for 26 June 2025.
Simultaneous Buyback of Existing Bonds
In conjunction with the new issuance, PhosAgro is undertaking a repurchase of its previously issued BO-02-01 series bonds, which are scheduled to mature on 17 November 2026. These bonds carry a monthly floating coupon rate pegged to the Central Bank of Russia’s key interest rate plus a 2.0% margin.
The bond buyback is aimed at optimizing PhosAgro’s debt profile by reducing exposure to variable interest rate liabilities and consolidating its funding around fixed-rate instruments. The buyback submission window closed on the same day as the book build—24 June 2025—and the final repurchase price was set at 101.50% of the nominal value.
This dual approach—raising new fixed-rate funding while repurchasing floating-rate liabilities—demonstrates PhosAgro’s proactive and sophisticated debt management strategy in an evolving economic environment.
Role of Gazprombank and Market Innovation
Gazprombank (JSC), one of Russia’s leading financial institutions, acted as both the bookrunner and placement agent for the BO-02-03 series bond issue, and as the repurchase agent for the BO-02-01 bond buyback. The bank played a central role in structuring the transaction and executing it efficiently within the short time frame.
Denis Shulakov, First Vice President of Gazprombank, highlighted the innovative nature of the transaction:
“PhosAgro has completed a unique deal for the Russian market in terms of managing a public debt portfolio. This transaction involved the placement of dollar-denominated bonds that settle in roubles, exchanged for rouble-denominated bonds being repurchased. It is not only a novel approach but also an effective and timely solution for public debt management. Importantly, this issuance achieved the lowest implied coupon rate among all foreign currency bond placements in the primary Russian market this year.”
Shulakov’s remarks underscore how this deal could serve as a blueprint for other Russian corporates seeking to manage foreign currency exposure and reduce financing costs amid fluctuating interest rate conditions.
Strategic Financial Planning and Market Confidence
PhosAgro has consistently emphasized the importance of maintaining a prudent and forward-looking financial strategy. With its diversified global operations, a stable revenue base driven by demand for fertilizers, and an ongoing commitment to ESG principles, the company has positioned itself as a reliable issuer in capital markets.
Alexander Sharabaika, Deputy CEO for Finance and International Projects at PhosAgro, elaborated on the strategic rationale behind the transaction:
“Financial sustainability and effective debt management remain key priorities for PhosAgro. This transaction represents a compelling example of how we are actively refinancing our existing debt portfolio through the Russian capital market. The successful placement of foreign currency bonds at such favourable terms allows us to not only lower our borrowing costs but also optimize the overall structure of our debt.”
“The strong response from investors is a testament to their confidence in PhosAgro’s financial stability, our growth trajectory, and our reputation as a trustworthy borrower,” Sharabaika added.
A Milestone for the Russian Bond Market
This transaction carries broader implications for Russia’s financial markets. The ability to place foreign currency bonds denominated in U.S. dollars but settled in roubles illustrates the increasing flexibility and sophistication of the domestic debt market infrastructure.
In a year characterized by global market volatility and evolving monetary policies, PhosAgro’s bond deal has emerged as a model of how well-established Russian companies can tap into domestic investor pools to meet their foreign currency funding needs without relying on external markets.
It also signals renewed confidence in the stability of Russia’s financial system and offers a potential roadmap for similar issuers seeking to rebalance their liabilities amid changing macroeconomic dynamics.
