Favorable market conditions are leading up to 10 Russian companies to consider issuing Eurobonds by the end of this year, VTB Capital’s head of debt capital markets said on Thursday, according to Reuters.
After a slump brought on by Western sanctions imposed in 2014, effectively shutting out some Russian businesses from the global debt market, Russian companies are gradually increasing their presence on the Eurobond market.
VTB Capital, the investment arm of Russia’s second-biggest state lender VTB, usually acts as bookrunner for Russian sovereign Eurobond issues and is one of the main organizers of corporate borrowing in the country.
“The market is really good now … There was a rally in sovereign and corporate Eurobonds. The sanctions theme is losing strength, investors expect good yields. And Russia is the country that keeps on offering good yields,” VTB Capital’s Andrey Solovyov told Reuters.
Such conditions are likely to be in place until early July and companies will try to tap markets in September after the summer lull, Solovyov added.
“I think we will see 5-10 placements by the end of the year,” he said.
Speaking on the sidelines of the annual SPIEF economic forum in St Petersburg, Solovyov said Russian companies that represent natural resources, energy, infrastructure and metal sectors are among the most likely candidates for Eurobond placements.
“This is what investors understand and are willing to buy,” Solovyov said, adding that the bulk of the bonds are likely to be denominated in the U.S. dollar.
Solovyov declined to disclose details of Moscow’s plan to issue a sovereign Eurobond this year but said market conditions are also favorable for that.
Russia raised $3 billion in a new dollar-denominated Eurobond and 750 million euros ($842 million) in a top-up issue of an existing euro-denominated Eurobond in March, tapping the global bond market for the first time this year.