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Russia Picks Banks for Global Eurobond Issue

MOSCOW, May 18 (Reuters) - Russia has picked three large state-owned banks to organise a sovereign Eurobond issue in 2021, the finance ministry said on Tuesday, indicating Moscow’s intention to proceed with global borrowing despite the latest U.S. sanctions.

Gazprombank, Sberbank CIB and VTB Capital were picked as organisers for the Eurobond issue, the ministry said. It did not provide further details on the timing of the placement nor the currency and size of the future issue.

Two banking sources familiar with the borrowing plans said Russia was considering placing a new 15-year euro-denominated bond as well as a top-up issue of an existing euro-denominated Eurobond maturing in 2027.

One of the sources, who spoke on conditions of anonymity due to the sensitivity of the issue, said the placement was possible by the end of the week, depending on market conditions.

The finance ministry has said it was confident that Russia would tap the global debt market this year and was considering a euro-denominated Eurobond.

Russia is preparing to offer bonds on the global market for the first time in 2021 despite heightened geopolitical risks that have recently battered Russian markets.

Russian assets took a hit from the latest U.S. sanctions against Moscow, which Washington announced in April over alleged malign activity, including interfering in last year’s U.S. election, cyber hacking and bullying neighbouring Ukraine.

They will bar U.S. banks from buying Russian rouble-denominated sovereign debt directly from mid-June, in addition to an existing ban for U.S. banks on buying sovereign Eurobonds directly from Russia.

Foreign investors still own the majority of Russian Eurobonds that offer investment-grade ratings. But foreign holdings of sovereign Eurobonds slipped to 54% as of April 1, the lowest in a year, from 55.1% three months earlier.

Gazprombank, Sberbank CIB and VTB Capital did not immediately respond to a Reuters request for comment.

(Writing by Andrey Ostroukh; Additional reporting by Darya Korsunskaya, Maxim Rodionov and Tatiana Voronova; Editing by Kirsten Donovan and Alex Richardson)

Source: Reuters


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