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Above 140 investors applied for new Russian Eurobonds — Finance Ministry

May 27, 21:30 UTC+3 MOSCOW
Despite the informal recommendation of the US and the EU regulators not to purchase Russian bonds, demand from foreign investors confirmed the high level of confidence of market participants in Russia
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© Anton Tushin/Tass, archive

MOSCOW, May 27. /TASS/. More than 140 investors applied for purchasing new Russian Eurobonds, 55% of them are banks, the Russian Finance Ministry said on Friday.

"Despite the informal recommendation of the US and the EU regulators not to purchase Russian bonds, demand on the part of foreign investors from different regions confirmed the high level of confidence of market participants in Russia as an issuer: the volume of the bid book exceeded the offer more twice and reached about $7 bln. More than 140 investors applied," the Finance Ministry said.

According to the Finance Ministry the main part of the issue (75%) was bought out by foreign investors from the UK, France, Switzerland, Asia and the US. The share of Russian banks, asset management companies and organizations that provide brokerage services, accounted for 25%.

New national infrastructure-based offering structure was tested during placement of Russian Eurobonds, the Finance Ministry said. Nevertheless, the ministry will continue to work with Euroclear and Clearstream.

"New national infrastructure-based offering structure was tested during placement of Russian Eurobonds. The Russian Ministry of Finance will continue active cooperation with Euroclear and Clearstream in order to complete the procedures for the conformity assessment of the new issue with the requirements to allow unhindered secondary circulation of bonds through these international clearing systems," the ministry said.

Fir the first time Russian company is going to operate the new placement - the National Settlement Depository that has a status of a central depository in the Russian Federation. The National Settlement Depository is a counterparty of the international clearing systems Euroclear and Clearstream and has all the necessary functionality to perform accounting and settlement of operations traditionally carried out by the leading foreign banks.

At the same time, the Ministry said that more than 140 investors applied for purchasing new Russian Eurobonds, 55% of them are banks. "Despite the informal recommendation of the US and the EU regulators not to purchase Russian bonds, demand on the part of foreign investors from different regions confirmed the high level of confidence of market participants in Russia as an issuer: the volume of the bid book exceeded the offer more twice and reached about $7 bln. More than 140 investors applied," the Finance Ministry said.

According to the Finance Ministry the main part of the issue (75%) was bought out by foreign investors from the UK, France, Switzerland, Asia and the US. The share of Russian banks, asset management companies and organizations that provide brokerage services, accounted for 25%.

On May 24, Russia’s Finance Ministry placed sovereign Eurobonds, first time since 2013. Securities for $1.75 bln in total were sold, while the demand was at $7 bln.

VTB Capital was selected as a sole organizer of the placement.

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