The first sales of Eurobonds in Russia since the launch of the new US sanctions


Russia sells 1.5 billion euros ($ 1.8 billion) in bonds, including its longest title in the common currency, as the United States seeks to improve relations with the Kremlin.

The United States expressed hope for a “more stable” relationship with Russia this week as countries negotiate a potential summit between Presidents Joe Biden and Vladimir Putin. Previously, Biden’s administration had waived some sanctions on a large Russian gas pipeline project, a month after announcing restrictions on ruble debt purchases that turned out to be less serious than feared.

“The appetite for risk is generally still strong,” said Maria Radchenko, analyst at Renaissance Capital in Moscow. “The correction in US equities did not affect the debt market. And the planned meeting between the two presidents encourages hopes of a de-escalation, which also provides support.

Russia last sold euro-denominated bonds in November following Biden’s election victory. US investors are not allowed to participate in non-ruble sovereign debt sales under the sanctions adopted in 2019, and from next month they will not be allowed to buy Russian government debt in local currency on the primary market. when the new sanctions come into effect.

The Ministry of Finance expects sell € 1 billion in 15-year bonds at a price of 2.65%, according to a person familiar with the matter who asked not to be identified because details are not public. It is also mining its 2027 bonds to the tune of 500 million euros with an expected face value of 98.50 cents, the person said.

The premium on the longer debt is expected to drop from 60 basis points to around 40 basis points in the coming months, according to Yuri Golban, analyst at BCS Global Markets.

VTB Capital, Gazprombank and Sberbank CIB have been hired for the sale.

– With the help of Anna Andrianova, Artyom Danielyan and Kira Zavyalova

(Updates with amount, price of the first paragraph. An earlier version of the story was corrected to show the unpaid euro amount tap in the second paragraph)


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