Page 117 - RusRPTOct22

8.5 Fixed income
In September 2022 Russian corporate borrowers placed RUB386bn worth of bonds in 62 issues, down by RUB74bn as compared to the previous month, with half of all issues being denominated in Chinese yuan and US dollars, Kommersant daily reported citing Cbonds data.
An issue of Metalloinvest and one issue of Rosneft with a total volume of CNY17bn were placed in September. Excluding foreign currency bonds, the primary market for ruble-denominated debt declined by half, to RUB222bn.
The market participants surveyed by Kommersant believe that the Central Bank of Russia (CBR) guiding for the end of rapid key interest rate cuts, a highly uncertain external environment (escalated by mobilisation and annexation of occupied territories in Ukraine) and the Finance Ministry expanding its own borrowing plans have led to a slowdown in the borrowing activity in September.
Issuer activity on the ruble debt market is expected to remain low until the end of 2022. However, for large issuers that can attract enough demand CNY bonds could remain attractive due to low yields of 3-4%.
About $28.9bn of Russian-issued, foreign-denominated corporate bond debt subject to UK law is in technical default due to non-payment, according to data compiled by Bloomberg News, which attributes the delays to the UK Treasury’s Office of Financial Sanctions Implementation (OFSI).
Russia’s Finance Ministry has announced it is cancelling the federal OFZ bonds auctions previously planned for September 28 due to increased financial market volatility. As followed by bne IntelliNews, facing a looming fiscal squeeze the Finance Ministry re-entered the federal ruble bond market in September with placements worth RUB40bn ($660mn) during three weekly auctions. This marked the first comeback to the OFZ market after a seven-month break due to Russia’s military invasion of Ukraine. While the first auction on September 14 managed to sell RUB10bn of OFZ-PD issue maturing in July 2031, the ministry had to cancel auctions of RUB20bn on September 20 and RUB30bn on September 21 due to an absence of bids at "acceptable price levels". The OFZ market situation has rapidly deteriorated under pressure from the Central Bank of Russia's (CBR) pause in monetary policy easing and the increasing fiscal risks.
8.5.1 Fixed income - bond news
117 RUSSIA Country Report October 2022 www.intellinews.com
Russian internet major VK (former Mail.ru) acquired 58% of the principal of the default convertible bonds held in the National Settlement Depository