FinMin: Russia could issue 30-year USD Eurobonds.

By bne IntelliNews March 18, 2011
According to deputy FinMin Dmitry Pankin, Russia could issue 30-year USD-denominated Eurobonds. He added that there was no need to issue the bonds in order to cover the budget deficit given the favourable global oil prices, but rather to set a reference for point for Russian borrowers for long duration financing attraction. To remind, in February Russia placed an issue of RUB-denominated 7-years Eurobonds at a coupon rate of 7.85%. More than 150 investors applied for the placement, with demand exceeded the proposed amount almost twofold. UK investors acquired 46% of the issue, US, European and Russian investors 27%, 22%, and 5%, respectively. Investment funds and banks acquired 57% and 18% of the issue, respectively. Also, last week FinMin Alexei Kudrin announced that Russia's borrowings this year are going to be cut by RUB 500bn due to higher-than-expected oil prices (it was planned to borrow RUB 1.7tn domestically and USD 7bn on foreign markets to cover RUB 1.8tn or 3.6% of GDP targeted budget deficit). Last year Russia issued USD 2bn worth of five-year Eurobonds yielding a coupon rate of 3.625% and USD 3.5bn worth of ten-year Eurobonds yielding a coupon rate of 5%. Government's external debt amounted to USD 34.43bn (up by 10% y/y), according to first estimates by CBR. In December unofficial sources announced that FinMin started a road-show for RUB-denominated Eurobonds, but called it off shortly after and postponed until more favourable market conditions.

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