Moscow. February 25. A number of banks have responded to the invitation of the Ministry of Finance to participate in the placement of sovereign Eurobonds of the Russian Federation.
On Thursday The Wall Street Journal reported that the U.S. government had warned some of the largest American banks to participate in the placement of Russian sovereign bonds, as it believes that it would violate the sanctions regime. Sanctions the rules do not prohibit the banks to support the Russian Federation in the placement of sovereign bonds, however, according to the American Ministry of Finance, assistance in attraction of external financing for Russia would be contrary to U.S. foreign policy.
The Finance Ministry in early February 28 sent banks requests for proposals for the provision of services on placement of bonds on the international capital market and financial services agent.
Deputy Finance Minister Sergei Storchak, answering the question of whether the Agency refusals from banks, told reporters that “this (refusal) is done in a different form – they are not responding”.
“Many banks will not respond. I the exact number can not say, but many simply never came back with our suggestions. This means that they do not participate. All refused: some never responded and some responded. We have, from whom to choose,” he said.
“Mailing list” of the Ministry of Finance was very wide, in addition to the traditional participants of the Russian sovereign loans, there are both banks, it is still not too active in the Russian Federation. In the list were Barclays, BNP Paribas, Bank of America Merrill Lynch, Bank of China, Wells Fargo, “VTB Capital”, Gazprombank, Goldman Sachs, J. P. Morgan, Deutsche Bank, Industrial and Commercial Bank of China, Credit Agricole, Credit Suisse, Landesbank Baden-Wuerttemberg, Morgan Stanley, Nomura, Sberbank CIB, Citigroup, Societe Generale, TD Securities, HSBC, RBC Capital Markets, UBS, Scotiabank, China Construction Bank, Agricultural Bank of China, UniCredit and Mizuho Financial.
For the current year’s budget provides for external borrowing up to $3 billion.
According to the WSJ, among the bankers of wall street while there is no consensus: some banks, for example Citigrup, said that to participate in the organisation of placing of the Russian Eurobonds will not, others, such as Goldman Sachs and JPMorgan, continued to explore options.
A warning from us authorities followed a question posed to one of the banks regarding the possibility of participation in the tender the Russian Ministry of Finance.
The U.S. Treasury told the newspaper that Russia remains a “high-risk” by the market, but also warned about reputation risks in case of return to normal (business as usual) business with Russia.
Representatives of some banks told the WSJ that their invitation to participate in the tender may partly be due to the attempt of the Russian side to check the existence of loopholes in the sanctions regime.
Western sanctions prohibit investors to buy new debt obligations of a number of major Russian companies and banks, but the government of the Russian Federation, these restrictions are not formally apply. At the same time, representatives of the American banks fear that proceeds from the placement of funds can then be directed under the sanctions of the company.
The last time the Russian Federation has attracted funds from the international debt market in September 2013, placing Eurobonds totaling $7 billion.