MOSCOW – The Russian Finance Ministry has begun a placement of sovereign Eurobonds, opening the bid book on two tranches maturing in 10 years and 30 years, a source in banking circles told Interfax.
The yield guidance is 4%-4.5% for the 10-year tranche and 5%-5.5% for the 30-year tranche. Pricing will take place on Tuesday.
VTB Capital (MOEX: VTBC), the organizer of both sovereign Eurobond placements last year, is the organizer for the new placement.
The placement is utilizing the infrastructure of the National Settlement Depository and the Euroclear international system.
Russia’s 2017 budget stipulates $7 billion in external borrowing, of which $4 billion will be exchanged for existing Eurobond issues and $3 billion will be new borrowing.
Placement of new Eurobond issues to replace existing ones will be carried out in stages. “Everything will be consistent. We go to external markets, look at quotations, price; the exchange takes place with the second stage. These are associated things… The main thing for us now is placing, looking at the value of our paper and, accordingly, a basis and benchmark for subsequent exchange,” Siluanov said earlier in June.
VTB Capital (MOEX: VTBC) has been selected as the agent for the new Eurobond issue. Gazprombank (MOEX: GZPR) and Sberbank CIB will also work on the exchange deal.
Russia placed two tranches of 10-year Eurobonds totaling $3 billion last year. VTB Capital was the sole organizer of both deals. The placements marked Russia’s return to external markets after an absence of nearly three years following the serious deterioration of the geopolitical situation triggered by the situation surrounding Ukraine.
