Official says Russian ministry to delay OFZ bonds for households

MOSCOW, Dec 8 (PRIME) -- Russia’s Finance Ministry is not ready to launch OFZ federal bonds for households as the project has turned out to be far more difficult than expected, Deputy Minister Sergei Storchak told reporters on Thursday.

The Finance Ministry has prepared a draft project for the OFZ issues to simplify access to investment in state bonds for households. The draft encompasses no secondary circulation of the bonds, but includes a possibility of submitting the bonds for a buyback before maturity after a minimum period of circulation at a price set by the ministry.

“This is a tough project, it turned out to be more difficult than we thought. That is why we are not ready to launch it for now. The issue here is not in the instrument itself, but in the infrastructure,” he said.

“First, it should be simple for households. Second, it should be profitable for the Finance Ministry. Third, we would like to have no secondary market for the instrument. If there is a secondary market, the instrument is for professional investors, while these investors are able to buy OFZ from us right now through brokers.”

On November 30, Bella Zlatkis, a deputy chairwoman of the executive board of the country’s top bank Sberbank, told Bloomberg that Russia may issue 50 billion rubles worth of OFZ bonds for households within the next two years. The rate of the bonds may be tied to the rates of ordinary OFZ with a premium to the market of 50–100 basis points taking into account the absence of a tax on income from the bonds.

(63.9114 rubles – U.S. $1)

End