Sberbank CIB: Russia may offer new Eurobonds in March

MOSCOW, Feb 27 (PRIME) -- The Finance Ministry may offer new Eurobonds already in March in the wake of improvement of Russia’s rating to an investment grade by international rating agency Standard & Poor’s (S&P), Alexander Kudrin, head of Sberbank CIB’s debt markets research department, said in a research note on Tuesday.

On February 24, S&P raised Russia’s long-term and short-term sovereign credit rating to investment grade BBB- from a speculative BB+. On the same day, international rating agency Fitch affirmed Russia’s ratings at BBB- with a positive outlook.

“Taking into account the increase of Russia’s rating to an investment grade by S&P and a continuous growth of the yield on U.S. treasuries, we suppose that the ministry won’t delay the placement (of new Eurobonds) and will hold it already in March,” Kudrin said.

This year the ministry plans to offer $3 billion new Eurobonds in 2018 and swap up to $4 billion of old Eurobonds with newer issues.

Kudrin also said that the ministry may offer long-term instruments, more likely with maturity of 15–30 years as the market is already saturated with Eurobonds maturing in 8–10 years. Demand for sovereign securities is still high, which is demonstrated by a 1–percentage point growth in quotations of long-term securities following the S&P’s decision, he said.

“That is why we suppose that the Finance Ministry will easily place the whole amount of the Eurobond offer with a minimum premium to the secondary market of 3–10 basis points,” he said, adding that the ministry will likely try to buy back the Russia–30 Eurobonds like it did last year.

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