Page 81 - RusRPTJul19

8.5.1 Fixed income - bond news
Russia's Finance Ministry and the Central Bank of Russia (CBR) are developing mortgage bonds and count on solid demand from foreign investors for the instrument, Reuters reported on May 31 citing the deputy minister Alexei Moisseev. As bne IntelliNews reported, mortgages have exploded in Russia and the volume of housing loans has been doubling every two years for a decade, supported by state initiatives to make mortgages cheaper and more attractive than ever.
Favourable market conditions are leading up to 10 Russian companies to consider issuing Eurobonds by the end of this year, VTB Capital investment bank's head of debt capital markets Andrey Solovyov told Reuters in a separate report. "The market is really good now ... There was a rally in sovereign and corporate Eurobonds. The sanctions theme is losing strength, investors expect good yields. And Russia is the country that keeps on offering good yields," Solovyov argues.
Russia's aluminium major Rusal is considering issuing yuan- denominated "panda bonds", as well as ruble-denominated domestic bonds, the company's financial market strategic director Oleg Muhamedshin told Reuters on June 10. As reported by bne IntelliNews, after Rusal had the US sanctions lifted in February 2019, the company is expected to deliver solid results starting with 2Q19, and plans to tap debt markets again as its credit ratings remained intact. Muhamedshin told Reuters an initial issue of RUB10bn ($155mn) will test the market, with possible extension of the placement given sufficient demand. In the beginning of April the company already placed RUB15bn issue yielding 9%, oversubscribing the initial RUB10bn proposed. Hong Kong-listed Rusal is also working with the Chinese rating agencies to recover its credit ratings to resume the issues of CNY-denominated "panda bonds", he said. In 2017 the company registered an issue of CNY10bn ($1.5bn), out of which one placement was made for CNY1bn.
Russia's natural gas giant Gazprom could increase its borrowing programme by RUB100bn ($1.55bn) in 2019, Interfax reported on June 10 citing unnamed sources in the company.
81 RUSSIA Country Report July 2019 www.intellinews.com