LONDON, Oct 18 (IFR) - Lukoil is considering launching its
first international bond sale in more than three years in the
coming weeks, according to people close to the company, with
the Russian oil producer keen to tap into rising demand for
The oil company mandated Citigroup and JP Morgan to issue an
international bond more than two years ago, but has held off on
the sale against the backdrop of escalating sanctions against
Russia, low oil prices and a deep recession.
Sources close to Lukoil say bosses now feel that conditions
and sentiment have improved sufficiently to consider launching a
deal, with a transaction expected before the end of the year -
and possibly within weeks, if pricing targets are achievable.
"This is going to be a big deal and should give a big kick
to Russian issuance," said one source in Russia. "It has been
two years in the making."
Lukoil declined to comment.
Russian bond issuance has gathered speed over the past
couple of months with deals from the sovereign, as well as
various corporates and banks. But, apart from state-owned
Russian Railways, no blue-chip corporate has yet sold bonds.
Lukoil has previously indicated it might be ready to issue.
A senior executive said in June it was interested in returning
to the Eurobond market and was waiting for favourable
But the Russian oil producer is renowned for being
notoriously price sensitive - something that has previously held
up transactions. Lukoil has also suggested a transaction in the
past without coming to market.
In January 2015, for example, chief executive Vagit
Alekperov told the Russian press that it planned to begin a
roadshow that spring but nothing materialised.
Citigroup and JP Morgan have long been close to Lukoil.
Russia's largest independent oil producer signed a US$1bn bridge
loan to a potential US dollar bond with the two US banks in July
Lukoil is rated BBB- by both Standard & Poor's and Fitch.
(Reporting by Sudip Roy and Gareth Gore, and additional
reporting by Robert Hogg; Editing by Julian Baker)