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bne June 2018 New Europe in Numbers I 59
Sanctions kill off Russian bond issues Ben Aris in Berlin
The new US sanctions imposed on Russia on April 6 took their toll on bond issues in the month. The total issued crashed to a paltry $180mn. Only two banks managed to get three bonds away.
Russian investment bank Renaissance Capital issued a $6.2mn short-term bond that matures at the end of this year. Although RenCap was founded
by foreigners in Russia, these days it has at least as much business in Africa and its owner Mikhail Prokhorov has so far escaped the Specially Designated Nationals And Blocked Persons List (SDN List). Up-and-coming broker/ dealer BSC Global Markets was back
in the market with a larger $150mn issue that matures in 2028, according to Cbond’s data, and has been a regular issuer this year.
In March Russia defied western pres- sure that was building in connection with the scandal that followed the
Russia: Volume of new issues, $mn
poisoning of former spy Sergei Skri- pal. It managed several large bond issues. While the US Treasury Depart- ment (USTD) has specifically said on two occasions this year that Russian sovereign bond issues will not be tar- geted by sanctions as that would cause problems on the capital markets for everyone, the threat of sanctions has again made all Russian assets toxic, thus the number of issues has dropped like a stone.
The total $180mn raised with issues in April was a fraction of the $4.8bn raised the same month a year earlier, and
the total of $9.4bn raised YTD this year is also now down compared with the $11.9bn that was raised in the first four months of last year by Russia.
Bond issues from the rest of the Commonwealth of Independent States (CIS) brought more action. Companies from the rest of the region raised
$5.2bn with 11 issues, down on the same month a year earlier when they raised $8.1bn with 13 issues. YTD companies in the CIS (including Russia) have raised a total of $16.4bn, slightly down on the $17.9bn raised last year thanks to Russia’s poor showing in April.
Issuers were a lot more active in Central Europe where a total of 11 bonds were issued worth a collective $5.8bn, up on the same month a year ago with $3.5bn by 5 issuers. However, YTD that left the CEE region down year- on-year with a total of $19bn issued
so far this year compared to $20.9bn issued by this time last year.
The biggest issue in CEE was a $2bn sovereign bond from the government of Turkey, which matures in 2028. So far this year, Turkey has raised a total of $4bn from international markets while it plans $6.5bn worth of Eurobond issues in all across 2018.
Source: Cbonds
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