MGKL launches 7.6B RUB convertible bond on SPB Exchange

What's the deal? Russian pawnshop and resale operator MGKLDealroom has a profile for this one. Try Dealroom → has begun placing its Series SO-001 convertible bonds on the SPB Exchange, aiming to raise up to 7,608,000,000 RUB (about $100 million). The bonds are being sold via closed subscription to qualified investors.

The terms: MGKL is offering 1,268,000,000 bonds at a face value of 6 RUB each. The coupon rate is 15% annually, paid over 30-day periods, with a five-year maturity.

The convertible angle: Investors can apply to convert the bonds into MGKL shares 20 days before maturity, at a 1:1 ratio. That structure links the debt directly to the company's equity performance over the coming years.

Why now? The listing comes with a tiered incentive scheme to pull in early buyers. On purchases of 60,000 RUB or more, investors can earn an extra 25% of their investment by joining between July 10 and 17, 20% from July 20 to 24, and 10% from July 27 to August 10.

What's the endgame? MGKL is also moving to support its stock. On July 7, its board approved a share buyback through subsidiary Komanda MGKL for up to 896.79 million RUB at market price, a step the company said should "increase long-term value for shareholders."

The signal: The convertible issue and buyback together mark an effort by MGKL to raise substantial capital while signalling confidence in its own equity. For a mid-cap issuer, tying bond returns to future share conversion offers investors upside beyond the fixed coupon — and gives the company a five-year runway before the debt comes due.

Read more: Vedomosti