Russia picks banks for global Eurobond issue
By Elena Fabrichnaya and Andrey Ostroukh
MOSCOW, May 18 (Reuters) - Russia has picked three large state-owned banks to organise a sovereign Eurobond issue, the finance ministry said on Tuesday, indicating Moscow's intention to proceed with global borrowing in the near future despite the latest U.S. sanctions.
Gazprombank, Sberbank CIB and VTB Capital were picked as organisers for the Eurobond issue, the ministry said. The ministry, which had earlier said it was considering a euro-denominated bond, 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 0#RU226212752= .
One of the sources, who spoke on condition of anonymity due to the sensitivity of the issue, said the placement was possible by the end of the week, depending on market conditions.
Foreign investors own the majority of Russian Eurobonds that offer investment-grade ratings. Foreign holdings of sovereign Eurobonds were at 54% as of April 1, the lowest in a year.
Russia is preparing to offer Eurobonds for the first time in 2021 despite lingering geopolitical risks that have recently battered Russian markets.
Russia chose a "relatively quiet moment" for the placement as foreigners were buying back its treasury bonds and the rouble was paring recent losses ahead of a summit between President Vladimir Putin and U.S. counterpart Joe Biden due next month, said Dmitry Dolgin, chief economist at ING in Moscow.
The market turmoil has faded in past weeks after the U.S. imposed sanctions against Moscow over alleged malign activity, including interfering in last year's U.S. election, cyber hacking and bullying neighbouring Ukraine. Moscow denies wrongdoing.
The new sanctions 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.
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, Alex Richardson and Nick Macfie
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