Page 86 - RPTRusFeb17

8.5 Fixed income
A Bloomberg survey on the outlooks for EM bond investment in 2017 found that Russia and Brazil top the list of fund managers must haves this year so far. Russian bonds were also in high demand last year on the carry-trade. Indeed, the Bloomberg survey found most Russian assets are in high demand. In a survey of 16 investors and analysts conducted January 23 to February 1, Russia’s bonds and currencies got the strongest backing among 10 developing economies. China was the least favoured.
8.5.1 Fixed income - bond news
Aluminum producer UC RUSAL has registered a prospectus for a CNY10bn ($1.5bn) 7-year “panda bonds” o n the Shanghai Stock Exchange, the company said in a statement on February 9. Panda bonds are securities denominated in yuans, placed by non-Chinese companies on the Chinese market. RUSAL will become the first foreign company with its producing assets outside China to offer bonds on the Chinese debt market via a placement on the Shanghai Stock Exchange. RUSAL can decide on the placement in 12 months from registration. The company plans to spend the funds on the purchase of raw materials for its facilities.
Russian steelmaker Severstal prepares two Eurobond issues, the company said on February 9. The company is preparing a five-year issue of exchange bonds worth of up to $250mn, to be issued by Cyprus-registered subsidiary Abigrove Limited. On February 10, Severstal will start a roadshow in the US and Europe for five-year Eurobonds, with meetings with investors organised by Citi, JPMorgan, ING, and SG CIB. Recent reports saw the renewed financing efforts of Russian steelmakers and metals majors as pointing to increased confidence in the sector . NLMK said in December it could issue Eurobonds this year, Evraz is considering a convertible bond issue, while Russia's largest steel pipe maker TMK is considering an SPO. Severstal saw its revenue decrease 7.5% year-on-year to $5.9bn (€5.5bn) in 2016, the company said on February 1 , attributing the drop to a substantial decline in average steel selling prices at the beginning of the year. Severstal's Ebitda was down 8.8% y/y
86 RUSSIA Country Report February 2017 www.intellinews.com