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23 September 2016
The Financial Times
Second time lucky? New Russian debt placed ‘entirely internationally’


Russia’s $1.25bn sovereign bond tap was entirely placed with international investors, according to Russian bank VTB Capital, which worked on the deal.

US investors bought 53 per cent, while the UK was allocated 30 per cent of the bond and Europe 13 per cent, VTB said. The remaining 4 per cent went to investors in Asia, writes Thomas Hale.

Russia’s original dollar bond, which it issued in May and was tapped again this week, was delayed due to complications over whether it would be eligible for international clearing. Only $1.75bn was issued, down from an expected $3bn.

The lack of clarity over clearing dissuaded many international buyers from buying the bond. When it eventually became eligible at the end of July, it jumped sharply in price, and is currently trading far above its issuance level.

Andrew Solovyev, global head of debt capital markets at VTB, said US investors were “largely excluded from the original issue by the inability of European clearing houses to provide access”.

Asset managers bought 51 per cent of the issue, with hedge funds taking 27 per cent, according to VTB, which is state-owned.

Corporate Communications VTB Capital