MOSCOW Feb 21 Russian companies could issue
three times as many Eurobonds this year as investor appetite
returns after three torrid years linked to the Ukraine conflict,
bankers and analysts say.
Investors have snapped up more than $2 billion of Russian
corporate Eurobonds so far in 2017, including those of aluminium
giant Rusal and gold producer Polyus,
marking a relatively strong start to the year.
Banking sources say many more companies are preparing to
come to market in the coming weeks and months.
"The window for placements by Russian issuers is open
without doubt. Foreign interest in Russia is very high," said
Andrey Solovyev, head of debt capital markets at Russian
investment bank VTB Capital.
Russian debt is attractive for overseas investors partly
because of the high yields it offers compared to Western
instruments. Foreign investors had been underweight Russian
bonds but have in recent months been adding to their positions.
Egor Fyodorov, a debt analyst at ING Bank in Moscow, said
Russian companies could issue $30 billion of Eurobonds this
year, versus $12 billion in 2016 and just $3 billion in 2015.
That would still be some way off the $50 billion or so that
Russian firms issued annually in 2012 and 2013, prior to the
imposition of Western sanctions over Ukraine in 2014 and the
economic slump that followed.
Bankers say issuance this year will probably come mainly in
the first half of 2017, as firms will be keen to place bonds
before the U.S. Federal Reserve raises rates and makes borrowing
in dollars more expensive.
Another factor supporting issuance is that much of the
Eurobond debt issued in the boom years of 2012-2013 will come
due over 2017-18.
Sberbank CIB analysts estimate there will be around $52
billion of Eurobond redemptions over 2017-2018, with around half
of that debt issued by companies that are not under Western
Sberbank CIB's head of debt capital markets Olga
Gorokhovskaya said: "Very favourable market conditions have
formed, and it's not certain whether these possibilities will
remain in the medium term."
(Writing by Alexander Winning; Editing by Katya Golubkova)