The period under review saw an increase in long-term borrowings, mainly due to the placement of three Eurobond issues in 2018 (one issue worth RUB 20 bnThe issue won annual Cbonds Award 2018 as Best Primary Eurobond Deal. placed in February and two issues worth RUB 15 bn and 1.5 bn offshore Chinese renminbi placed in November). On top of that, in April 2018, RusHydro and the Far East and Baikal Region Development Fund entered into a special-purpose loan agreement worth RUB 5 bn to finance the construction of off-site facilities of Sakhalinskaya GRES-2. In July 2018, the Group also successfully raised RUB 20 bn under a loan agreement with VTB Bank. At the end of 2018, the rate of ruble-denominated borrowings averaged about 8% per annum. In December 2018, RusHydro prepaid an ECA-covered FX loan of some EUR 69 mn from UniCredit Bank Austria AG.

In 2018, the Group was also bringing down its short-term debt. In February 2018, RusHydro repurchased its series 07 and 08 In February 2018, the holders of of RusHydro’s series 07 and 08 ruble bonds issued in February 2013 for a total amount of RUB 20 bn, partially used their put option for securities. Bonds that were not put by the holders for early redemption, with the nominal value of RUB 2,196 mn will be floating before the maturity date in 2023. ruble bonds under the put option for a total of about RUB 18 bn. In March, the Group repaid a loan of RUB 10.6 bn from Sberbank. July saw a successful redemption of series BO-P01, BO-P02 and BO-P03 exchange bonds worth RUB 15 bn. In February 2018, the Group terminated its contract of guarantee to meet obligations of PJSC Boguchanskaya HPP under a loan agreement with VEB worth RUB 25.9 bn as at December 31, 2017, which also helped reduce leverage.

As at December 31, 2018, the shares of the Group’s ruble-denominated and fixed-rate consolidated financial debt (excluding liabilities on the non-deliverable forward with VTB Bank (PJSC), including hedging ruble liabilities to issue Eurobonds denominated in offshore Chinese renminbi) account for about 98% and 91%, respectively. This means the minimum level of currency and interest risks for the Group in terms of financial debt.

More information on the main changes in the structure of long- and short-term debt (excluding forward) is available below.

In 2018, the long-term part of the Group’s borrowings surged by RUB 67.036 bn (73.7%) to RUB 157.9 bn, mainly driven by long-term financing raised through three Eurobond issues in 2018 (two denominated in rubles and one – in offshore Chinese renminbi) and bilateral loan agreements.

In 2018, the short-term part of the Group’s borrowings dropped by RUB 39.7 bn (50.5%) to RUB 38.9 bn, primarily due to the maturity of long-term loans and bonds (including exchange and local bonds totaling about RUB 15 bn and about RUB 18 bn, respectively). As the remaining drawdown for the Group’s current loan agreements amounted to more than RUB 191 bn at the end of 2018 and substantially exceeds the need for short-term debt refinancing, financial risks are considered as insignificant.

Bonds

As at December 31, 2018, the outstanding bonds of RusHydro include seven issues for a total amount of RUB 70.0 bn (the aggregate value of outstanding bonds is RUB 28.2 bn).

Issue parameters			Series 01 and 02 bonds	Series 07 and 08 bonds	Series 09 bonds	Series BO-P04 exchange bonds	Series BO-P05 exchange bonds
Bond type	Non-convertible certificated interest-bearing bearer bonds with mandatory centralized custody	State registration number	4-01-55038-E 4-02-55038-E	4-07-55038-E 4-08-55038-E	4-09-55038-E	4B02-04-55038-E-001P	4B02-05-55038-E-001P
Face value	RUB 1,000	Registration date	23.09.2010	27.12.2012	27.12.2012	01.04 2016	09.06 2017
Nominal amount of each issue	Series 01 – RUB 10 bn Series 02 – RUB 5 bn Series 07, 08, 09 – RUB 10 bn each Series BO-P04 – RUB 15 bn Series BO-P05 – RUB 10 bn	Placement date	25.04.2011	14.02.2013	28.04.2015	07.04.2016	16.06.2017
		Offer date	22.04.2016	13.02.2018	27.10.2017 21.04.2023
		Maturity date	12.04.2021	02.02.2023	15.04.2025	04.04.2019	12.06.2020
Offering price	100%	Coupon rate	Coupons 1–10 – 8.0% p.a. Coupons 11–20 – 9.5% p.a.	Coupons 1–10 – 8.5% p.a. Coupons 11–20 – 0.1% p.a.	Coupons 1–5 – 12.75% p.a. Coupons 6–16 – 7.5% p.a. Coupons 6–16 – coupon rate to be determined by the issuer	Coupons 1–6 – 10.35% p.a.	Coupons 1–6 – 8.2% p.a.
Form of offering	Open subscription, bookbuilding	Yield	8.16%	8.68%	13.16%	10.62%	8.37%
Coupon payments	semi-annual	Last trade yield as at December 28, 2018, % p. a.	Series 01 – 7.75% Series 02 – 8.19%	Series 07 – 8.1% Series 08 – 8.93%	Series 09 – 8.22%	Series BO-P04 – 7.69%	Series BO-P05 – 7.75%

Eurobonds

As of December 31, 2018, the outstanding bonds of RusHydro include four issues of Eurobonds for a total of RUB 55 bn and 1.5 bn of offshore Chinese renminbi placed by RusHydro Capital Markets DAC company on Irish Stock Exchange under Reg S rules. All issues have the confirmed long-term rating from S&P / Moody’s / Fitch / ACRA aligned with RusHydro’s credit rating.

Offering date	Maturity date	Issue currency	Amount, bn	Coupon rate, %	Coupon payments	ISIN
28.09.2017	28.09.2022	RUB	20.0	8.125	Semi- annual	XS1691350455
15.02.2018	15.02.2021	RUB	20.0	7.4	Semi- annual	XS1769724755
21.10.2018	21.11.2021	CNH	1.5	6.125	Semi- annual	XS1912655054
27.10.2018	27.01.2022	RUB	15.0	8.975	Semi- annual	XS1912654677