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Weekly Lists
February 2, 2018 www.intellinews.com I Page 28
bne:Credit
Kremlin takes unprecedented step to hem in Russian regional debts
The Kremlin has taken an unprecedented step to hem in Russian regional debts. Authorities in Khakassia and Kostroma will no longer be allowed to make decisions concerning their own expenditures – Moscow will handle that for them, FPRI Bear Market Brief reports.
The two regions have run up large debts to the federal centre, having taking advantage of near-zero interest rates offered by Moscow in 2016 and 2017 to help highly-leveraged regions swap out high-interest commercial loans with cheaper “budget credits”. The Ministry of Finance cancelled this programme in 2018 as the debt in the regions was getting out of control.
Instead, the Kremlin has arranged for state banks to offer financing to needy regions at a rate equal to the Russian Central Bank’s key rate (currently 7.75%) plus one. It’s still a cheaper alternative to commercial loans, but the new programme means that between 2017 and 2018, the cost of regional debt-financing has increased by almost 80 times.
Poland placed €1bn worth of green bonds with international investors on January 31, the country’s ministry of finance said on January 31.
That is the second time Poland tapped investors with the still relatively new sovereign debt instrument, proceeds from which will finance pro-environmental investment.
Poland sold the green bonds – which come due in August 2026 – at 23bp over mid-swaps, achieving a yield of 1.153% and a coupon of 1.125%, the ministry said. Investor demand came in at €3.25bn.
Warsaw mandated BNP Paribas, Citi, Commerzbank, Societe Generale and PKO BP to be bookrunners on the deal.
The National Bank of Belarus (NBB) will cut the monetary policy refinancing rate by 50bp to 10.5% on Valentine’s Day, the central bank said on January 30.
The board approved the cut on the back of generally improving economic date. Inflation has fallen to 4.6% as of December and the bank forecasts further falls this year.
Economic growth has also picked up after two years of recession and the country finished last year with $7.3bn in gross international reserves (GIR). The republic expects to tap the international capital markets again this year following the successful placement of a dual-tranche $1.4bn Eurobond last year.
Poland returns to green bond market with €1bn issue
National Bank
of Belarus to cut monetary policy refinancing rate by 50bp to 10.5%