Page 92 - RusRPTNov22

recovered and reached 17.56 trillion rubles. And all thanks to the issuers of the first echelon - many had to increase their presence in the domestic market in the conditions of closed external sources of funding, the review says. First-class issuers were forced to offer rates this year that could be of interest not only to institutional investors, but also to private ones. For example, since the middle of the year, large companies began actively placing bonds in yuan on the Moscow Exchange - such issues were made by Rusal, But medium and small issuers found themselves in the risk zone, which increased the frequency of defaults: companies lost liquidity, first due to the spring flow of money into profitable deposits, and later – into bonds of reliable issuers at competitive rates. According to Expert RA, over the past year 13 issuers of different rating levels and different scales of business defaulted - the default event moved from the category of exotic to the category of permanent risk.
Shevelenkov from the Moscow Exchange expressed concern about the reduction in the number of corporate issues circulating on the market and the increase in market concentration. According to him, now there are just over 1,900 bond issues on the market, while earlier their number exceeded 2,000, but now 10 issuers account for almost 60% of the capitalization. The share of Eurobonds decreased compared to the end of 2021, from 31% to 20% of the total volume of placed bonds. At the same time, new types of bonds appeared on the market: approximately 3% are replacement bonds, and 1% are yuan-denominated bonds.
What makes the growth Analysts of "Expert RA" expect that in the next year the activity of the bond market will continue to be concentrated in the upper echelons, where the combination of profitability and risk will remain attractive for both institutional and private investors. High-risk issuers, whose only source of liquidity is private funds, will be in a difficult position. Expectations for the growth of the bond market in 2023 are primarily associated with future OFZ placements to finance the budget deficit for 2023, notes Sergey Golenishchev, senior personal broker at BCS World of Investments: the budget was drawn up with a deficit of 2.9 trillion rubles, of which 2 trillion will be financed from the NWF. It is logical to assume that the missing trillion will be covered by new public debt placements, the expert adds.
8.5.1 Fixed income - bond news
Magnitogorsk Iron and Steel Works (MMK) will offer $500mn of replacement bonds with maturity in 2024, the company said in a statement on Thursday. The terms of the issue are the same as of the Eurobonds placed by ММК International Capital DAC at a coupon rate of 4.375% annually. The new Eurobond issue is to be paid for by cession of property and other rights on the original issue. Early maturity is not envisaged.
In October US Rusal is issuing new CNY bonds with the coupon of no
92 RUSSIA Country Report November 2022 www.intellinews.com