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By Sudip Roy
LONDON, Sept 22 (IFR) - The Russian Federation has opened
books on a tap of its US$1.75bn May 2026 Eurobond.
The sovereign will seek to issue up to US$1.25bn to meet the
US$3bn it is budgeted to raise through external borrowings this
The original deal, which was sold in May, was Russia's first
in US dollars since the EU and US imposed sanctions in 2014
following the annexation of Crimea.
The deal saw limited foreign investor participation, partly
because Euroclear and Clearstream had yet to decide whether the
bonds could be settled through their systems.
However, in late July Euroclear gave the thumbs up, paving
the way for a further placement.
This reopening can be settled through both Euroclear as well
as the local depositary institution in Moscow - the National
This should help the deal, said Tim Ash, senior credit
strategist at Nomura.
"The lack of Euroclearability was the key factor last time
around which kept foreign bidders on the sidelines and that
seems to have been significantly underpinned by
Russia-related entities," he said.
He added that statements in the documents saying the funds
raised through the tap will not be used to finance sanctioned
entities should provide further comfort to international
The bonds are being marketed at a price of 106.00 or yield
of 3.99%. That compares with a reoffer yield of 4.75% on the
The bonds were trading at 105.75-106.75 at Wednesday's
close, according to Thomson Reuters data
VTB Capital is sole lead on the 144A/Reg S deal, which is
The notes will be rated BBB- by Fitch.
(Reporting by Sudip Roy, editing by Julian Baker)