Russian FinMin places $470mn CPI-linker bond issue

By bne IntelliNews November 12, 2015

Russia's Finance Ministry fully placed an issue of OFZ-IN inflation-pegged federal bonds worth RUB30.5bn ($470mn) at a weekly auction on November 11, the ministry said.

Average yield on the bonds amounted to 2.72% and the demand for bonds was expectedly high at RUB73.2bn.

In October, the ministry fully placed a RUB20.2bn issue of such bonds to solid demand of RUB92.6bn, guaranteeing a premium over the average inflation rate.

"High demand for the CPI-linker was barely a surprise, given that it was already squeezed at the debut placement in July," Maxim Korovin of VTB Bank commented at the time.

The Finance Ministry also said this week that it may place OFZ denominated in CNY/yuan in 2016, further expanding the best-performing emerging local debt market.

The head of the ministry's debt department, Konstantin Vyshkovsky, was cited by newswires as saying that CHY-denominated OFZs of up to $1bn would be regulated by Russian law and would trade on the Moscow Exchange.

Sergei Shvetsov, first deputy head of the Central Bank of Russia (CBR), said the issue would probably take place around mid-2016 as infrastructure between central depositories needs to be established to enable mainland Chinese investors to buy the bonds, RIA Novosti said.

As demand for OFZs slowed in the summer, the Finance Ministry responded by selling RUB50bn-60bn ($1bn) directly to Chinese investors and placing RUB75bn of OFZ-IN inflation-pegged bonds with a real guaranteed yield of 2%, which Uralsib said was "an attractive offer for the Russian debt market".

Related Articles

McDonald's to expand investment in Russia by 40% in 2019

US-owned fast food franchise McDonald’s will boost its investment by 40% in 2019 over last year, the company said on February 6. McDonald’s is already the biggest foreign owned fast food ... more

Gazprom Neft to invest $1.4bn in Serbia by 2025

The oil production arm of Russian gas giant Gazprom,  Gazprom Neft plans to invest $1.4bn in Serbia by 2025, President Vladimir Putin said during his visit to Serbia, as quoted by ... more

Tax collection in Russia soars 22% in 2018 thanks to improved efficiency and shadow economy crackdown

The Russian government is on the hunt for new revenues to meet its ambitious RUB12 trillion ($180mn) spending plan.  A VAT hike from 18% to 20% went into effect that will provide some new ... more

Dismiss