Alfa Bank, the Russian privately-held lender controlled by billionaire Mikhail Fridman, is expected to close a major Eurobond deal on November 18 amid growing speculation of Russia being readmitted to international capital markets.

The Russian bank last tapped the Eurobond market in November 2014 when it raised $250mn. News of a possible deal comes amid a resurrection of Russia's bond markets and follows deals printed last month by Norilsk Nickel and Gazprom, the first in 11 months. Russia corporate bonds have jumped 25% so far this year as investors bet that the country is turning a corner in its relations with the West.

Alfa had initially sought $500mn but the order book was filled up with enough demand for five times that amount, according to one banker close to the deal.

"Alfa is a quality credit without any liquidity or capital issues," the banker told bne IntelliNews. "And there has been plenty of pent-up demand since Norilsk and Gazprom last month."

Reuters said the three-year deal is expected to price on November 18 with a possible yield of about 5.625%. UBS and Barclays helped to arrange an investor call with European and US investors on November 16.

Russian securities surged after a terror attack in Paris triggered a newfound solidarity between Russia and the US and fostered hopes it could lead to restoration of economic ties.  

"News that Russia and France were directly coordinating attacks on ISIL [Islamic State terrorist group] has provided material evidence for the more hopeful political view, and comments from President Vladimir Putin and US President Barack Obama have also been seen as broadly supportive," Cole Akeson, an equities analyst at Sberbank CIB, wrote in an e-mailed report on November 18.

Russia has been in a capital markets' doghouse since it annexed Crimea 20 months ago and fostered unrest by supporting separatists in eastern Ukraine, the scene of an armed conflict that has since claimed some 6,000 lives. Sanctions have all but blocked the country's leading corporates from raising financing at acceptable rates.

Proceeds from the Eurobond are likely to be stored to pay future refinancings. Alfa has about $1.7bn in bonds it needs to repay in 2017.

Like most Russian banks, Alfa has slowed its lending as the economy suffers from its first recession in six years.

Leonid Ignat, a spokesman for Alfa Bank, told bne IntelliNews that the lender's management were continuing "to monitor" the market for opportunities.

Bankers informed bne IntelliNews in October that Lukoil is another blue-chip issuer expected to jump into the Eurobond market if sentiment continues to improve.