Russia looks to bond issuance for first time since sanctions

Russia is exploring international bond issuance for the first time since the war in Ukraine sparked sanctions from the West in 2014, in a sign that the Kremlin is keen to find additional sources of revenue as the economy heads for a second year of recession.

The country’s finance ministry said on Friday it had approached 25 western investment banks and big Russian lenders Sberbank, VTB, and Gazprombank about a possible euro bond.

Russia last raised cash on international markets with a $7 billion bond in 2013, though with this year’s budget earmarking $3 billion for a possible sale the amount sold is likely to be lower.

An executive at one of the banks said the ministry was exploring raising €3 billion. A second banker at a European bank said Russia was likely to seek benchmark 10-year debt.

Viktor Szabo of Aberdeen Asset Management, said: "Trading in Russian paper has been quite strong in recent months. Russia could come to market now with bonds that yield less than they did in 2013." – The Financial Times Limited 2016