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16 March 2018

Sale signals Kremlin can still raise cash in western markets, despite sanctions.

Russia sold $4bn in eurobond issuances on Friday in a sign that the Kremlin can still raise cash in western markets despite sanctions and geopolitical tension with the west.

Investors’ order book for the two bonds on offer placed $7.5bn, said Andrey Solovyev, global head of debt capital markets at Russian investment bank VTB Capital, the sole lead manager and bookrunner.

An extra issuance for Russia bonds maturing in 2047 was placed with $2.5bn in volume and a 5.25 per cent yield, taking its total size to $7bn.

Another issuance maturing in 2029 was placed with a volume of $1.5bn and a yield of 4.625 per cent. Investors were divided roughly evenly between Russia, the US, and the UK.

Five per cent of the total volume was sold under a capital amnesty programme offering oligarchs discounted rates in an attempt to get them to move money stashed in the west back to Russia.

The finance ministry said it would spend $3.2bn on buying back Russia’s 2030 eurobonds, which it then intends to exchange for new ones to raise new debt.

Corporate Communications VTB Capital