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Interview by Andrey Solovyev, Global Head of DCM at VTB Capital, for Bloomberg

16 February 2016
VTB Capital’s Solovyev Sees Russia Selling Eurobonds This Year

Russia may sell foreign bonds in several currencies; of the new currencies it may offer, the yuan is the “most likely” candidate, Andrey Solovyev, global head of debt capital markets at VTB Capital in Moscow, says in interview.
  • Russia could sell yuan bonds in Hong Kong, mainland China or on Moscow Exchange
  • Eurobond will attract demand from foreigners, incl. Americans, because redemption proceeds from this yr and last need to be invested
  • State asset prices are below historical avg so it may be “more profitable” to borrow rather than privatization
  • Was surprised that Russia’s plan for foreign borrowing in 2016 is just $3b, Russia could easily sell $7b this yr
  • Finance Ministry will continue offering CPI-linkers and floaters at auctions since investors favor such instruments during volatility
  • Investors, such as pension funds, will be particularly interested in CPI-linkers amid inflation concern
  • Corporate Eurobond sales could resume in the spring; VTB Capital also working on Eurobond buybacks as some companies seek to reduce their foreign debt
  • Many companies are considering selling FX bonds on Russian mkt, however, selling USD bonds could be “problematic” for sanctioned cos. because of settlements

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