Sberbank CIB
The Corporate and Investment Banking Business of Sberbank

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Ruble Eurobond Sales May Make Comeback This Autumn: Sberbank CIB

30.08.2016

Bloomberg

Russian issuers may return to Eurobond market with RUB-denominated corporate offerings as soon as Sept.-Oct., Eduard Jabarov, managing director of capital markets at Sberbank CIB, says in interview.

NOTE: Novatek was last Russian co. to issue >RUB10b of Eurobonds in Feb. 2013.

As RUB yields are at record lows, quality Russian issuers can lock in advantageous rates for 7-10 years on foreign markets; cos. can “easily raise 15b-20b rubles”: Jabarov.

Sees strong demand from foreign real money investors; English Law is bigger factor for foreign investors than Euroclear access.

Sees no foreign interest for RUB bonds on domestic primary market.

RUB curve still inverted, potential for spread compression in long end.

NOTE: Russian Billionaire Seizes on Liquidity Largesse for New Bonds.

Cost of borrowing for first tier cos. in 3-10 year segment will probably dip below 9%.

Russian corporate borrowers showing interest in perpetuals; this requires changes to current legislation.

Possible freeze of savings pensions transfer to private pension funds for another year is “of a certain concern”; state cos. may end up looking for money in state wealth funds rather than on market.