Page 13 - RusRPTDec20

The Ministry placed several tranches including a €750mn ($885.60mn) seven-year bond with a yield of 1.125%, Reuters reports down from the initial asking prices of 1.25%.
The Ministry also offered a 12-year RUB1.25bn Eurobond that had a final yield guidance of 1.85% that would be placed at 2%, according to Reuters sources.
With its rock solid macro fundamentals investors remain keen on Russian debt. Bids for the Eurobonds exceeded €2.7bn ($3.2bn), one of the sources said, with the bulk of the interest coming from domestic investors.
“The issue is very attractive, especially if you look at relative pricing guide,” said Sergey Dergachev of Union Investment as cited by Reuters. “Russia is a rare issuer compared to other countries... and euro-issuance out of Russia has become very illiquid a few weeks after issuance, so you get some liquidity premia.”
The issue was organized by state-run banks VTB Capital, Gazprombank and Sberbank CIB but could be limited by US sanctions. In 2019, Washington imposed restrictions for US banks on buying sovereign Eurobonds directly from Russia but they do not restrict the buying of Russian Eurobonds on the secondary market and do not apply to other banks.
As of October 1, foreign investors held 57.5% of Russian Eurobonds, according to the central bank, as cited by Reuters.
Russia last tapped the global debt market in 2019, when it made two Eurobond issues in, which it raised $5.5bn and another 750mn euros.
Its previous plans to raise $3bn in Eurobonds this year were thwarted by the COVID-19 pandemic and by increased risks of Western sanctions, prompting Moscow to focus on borrowing at home instead.
Russia​ last tapped the global debt market in 2019, when it made two ​Eurobond issues​ in which it raised $5.5bn and another €750mn.
2.6 ​Russian retail investing gaining momentum
In the second half of this year Russians invested more money in financial markets than they put in bank deposits, Sberbank CIB said in a note on November 13.
Russian retail investors now hold more than RUB4 trillion ($51.5bn) in financial assets as banking deposit rates continue to fall and the average Russian starts to look around for a place to keep their savings that offers a better return.
For most of the last three decades the default investment has been bank deposits that paid double digit interest rates that both protected against high inflation and also made some money.
13 ​RUSSIA Country Report​ December 2020 www.intellinews.com