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MOSCOW, June 19 (Reuters) - Russia is issuing 10- and 30-year tranches of U.S. dollar-denominated Eurobonds, two sources familiar with the transaction told Reuters on Monday, adding that the order book would be closed on Tuesday.
The sources did not specify the exact amount the finance ministry aims to raise but said it was likely to be of a benchmark size. Yield guidance for the 10-year paper was 4.0-4.5 percent and for the 30-year debt it was 5.0-5.5 percent, they said.
Russian government debt stood at just 12.9 percent of gross domestic product at the end of last year, of which only about a quarter is owed to external investors. But the finance ministry plans to stay in international markets to help it develop its bond market.
“The government intends to maintain its presence in international capital markets and continue to develop a benchmark yield curve,” the prospectus for the Eurobond offering seen by Reuters said.
Settlement on Monday’s issues is set for June 23 and both papers will be settled via Euroclear and the National Settlement Depository (NSD), the domestic clearing house, the sources said. VTB Capital is acting as a sole arranger.
Last year Russia raised a total of $3 billion via two issues, its first foray into international markets since Western countries imposed sanctions on Moscow in 2014 over its role in the Ukraine crisis.
The first tranche, worth $1.75 billion, did not go smoothly: it was cleared by NSD only in the first such type of deal for the domestic clearing house, as Euroclear decided to stay away from the issue.
Euroclear started settlements with the paper in July. This year, Moscow intends to issue $3 billion in new debt and swap $4 billion in outstanding Eurobonds for new ones.
Two financial market sources told Reuters earlier this month that the ministry planned to offer an outstanding sovereign Eurobond maturing in 2028 as a swap for new paper, but the timing of the swap was unclear.
Overall, however, the finance ministry does not expect to increase its dependence on international markets as a source of funding.
“The government expects that the relative share of domestic and external public debt in the overall public debt profile will not change materially over the next three years and that domestic debt capital markets will continue to provide a key source of capital in the medium term,” Monday’s prospectus said. (Reporting by Kira Zavyalova and Oksana Kobzeva; Writing by Dmitry Solovyov/Katya Golubkova; Editing by Maria Kiselyova and Hugh Lawson)