Page 91 - RusRPTJun20

position at short notice in times of crisis, will be floating and be set at the key rate. The CBR will accept only government securities (OFZ and regional government bonds) as collateral, reports Sberbank CIB.
Looking at foreign participation in OFZ, local currency government bonds, after the initial globally-driven $4.0bn sell-off in March, foreign investors seem to have bought $0.7bn in April ​(non-residents bought around 20% of new placements), reflecting continued confidence in Russia's macro stability indicators (public debt of 12-13% GDP, liquid FX fiscal reserves of around 10% GDP), relatively high real rates, dovish CBR guidance, and lack of negative sanction newsflow.
8.5.1​ Fixed income - bond news
All of​ ​Polyus Gold​’s convertible bond holders have decided to convert their bonds into shares​. Converting the bonds into equity would mean an additional 1.52% of new GDRs to be issued. Given the likely hedged positions of convertible bond holders, some short-covering (of the hedges against bonds) might support the stock price in the short term, as GDRs are delivered to bondholders. Analysts note that converting $186.2mn into equity in 2Q20 is not accounted for in our model and could mean 7% lower net debt and net debt/EBITDA (0.9x).
91​ RUSSIA Country Report​ June 2020 ​ ​www.intellinews.com