Page 106 - RusRPTJul21

8.5 Fixed income
MinFin is planning another RUB1.5 trillion ($20.85bn) in OFZ issuances
after sanctions banning US banks and financial institutions from taking part on the primary market for Russian sovereign bond issuances came into effect on June 14. These sanctions pose no real threat to Russia’s ability to borrow since they only target the primary market. The April Central Bank data showed that non-residents held only 19.5% of all Russian debt, a 6-year low. The non-resident share has been inflated since early last year by state banks using offshore subsidiaries to foster the impression that Russian sovereign debt remains attractive. The new issuance should push the total external debt load to about RUB21 trillion.
The US sanctions on OFZ kicked in on June 14. The Russian Finance Ministry must feel very comfortable with 56% of the annual RUB 2.79 trillion local borrowing target already executed by mid-June. Thus, proper signalling to investors with regards to primary market tactics post the US restrictions is the only important point, for now.
Russia’s largest bourse, the Moscow Exchange, will decline orders to buy OFZ treasury bonds from clients registered in the United States, the Russian finance ministry said on June 29. The ministry said this decision was in response to US sanctions that from June 14 bar US investors from buying sovereign Russian bonds denominated in rubles directly from Russia.
106 RUSSIA Country Report July 2021 www.intellinews.com