VTB Capital
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International uproar over Russia seizing three Ukrainian navy ships last weekend did not stop Russia selling a €1bn 2.875% 2025 bond on Tuesday. But investor fears are growing ever higher over the likelihood of further US sanctions on the country. Russia’s pivot away from dollars seems to indicate the same concerns. Francesca Young, Sam Kerr and Lewis McLellan report. -
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VTB Capital has no interest in adopting blockchain technology for banking, said Dmitry Snesar, VTB’s head of client coverage, at VTB Capital’s Russia Calling conference in Moscow this week.
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Bankers love to advise their clients to look at the bigger picture and print now, for fear that that in just a few weeks or months, they could be facing a much tougher time. So the chorus of DCM officials criticising Russia for its timing in selling a €1bn seven year bond this week is more than a little hypocritical.
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Fears that the Russian Federation's €1bn bond issue would only find demand domestically seem to have been assuaged as a source close to the deal said well over half the deal was sold to international investors. That source also denied the deal was in any way designed to bait the West, and said its timing was simply a matter of wanting to get ahead of worsening market conditions.
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Russia is doing it again — for the second time this year it has picked yet another politically unpalatable week to print a sovereign bond. It seems to be sticking a middle finger up to the west as it rolls around in cash and shows off the access the country has to capital markets. But if that was the motivation behind this issue, it has not accomplished its goals.
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The Federation of Russia is returning to the bond markets for the first time since a set of US sanctions in April sent the country’s bond trading into a tailspin. But despite books for the bond already being in excess of €1bn, several bankers away from the deal are describing it as a “political statement” rather than a well thought out trade, and are heavily criticising the timing and choice of euros for the note.
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RusHydro will come to market for a dual tranche deal in rubles and offshore yuan, following a roadshow to promote the bonds.
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Russia’s Mechel has signed a $1bn-equivalent loan facility, as the metals and mining group pushes ahead with plans to restructure its debt portfolio by the end of 2018.
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The US Office of Foreign Asset Control (OFAC) has an unprecedented decision to make on whether to accept a reported offer from EN+ owner Oleg Deripaska to sell shares in the company to VTB Bank. The aim of the deal is to reduce the oligarch’s majority stake in the aluminium conglomerate, which, it is hoped, will result in sanctions against it being removed.
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Mozambique’s bondholders have presented a restructuring proposal to the government, following their rejection of Mozambique’s proposed package in March.
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The UK's foreign affairs committee report, released on Monday, holds the US Treasury’s sanctions strategy in high regard, because of the immediate impact on financial markets. But it misunderstands the reason for the US-driven sell-off, and so its recommendations are faulty as well.
