Brussels has approached the European banks with a proposal to avoid involvement in the placement of Russian Eurobonds, according to Financial Times, citing two sources familiar with the warning of the EU.
Despite the fact that entered against Russia sanctions do not directly prohibit the purchase of Russian debt, EU officials have privately appealed to European banks with a warning that was previously voiced by Washington for banks in the U.S., the newspaper notes. The EU believes that the funds raised through placement of securities, can be used “not to destination”, notes the FT.
According to the publication, the representatives of Brussels in private conversations with banking executives urged to remember about the risk that bonds can be used to bypass the sanctions, and to take precautionary measures, including insisting on actions that prevent income from the placement of securities by persons in respect of which the sanctions.
“Obviously, they don’t want us to have participated [in the placement of Russian Eurobonds]. <…> We do not recommended”, — told the publication the banker familiar with the warnings of Brussels.
If this warning message will convince European banks, Russia may be forced to abandon the first few years of attempts to market borrowings, notes the FT.
Earlier The Wall Street Journal reported that U.S. authorities have warned the big banks the U.S. to participate in placing of the Russian Eurobonds. In Washington felt that this may conflict with the sanctions policy against Moscow. Then the publication reported that not all banks were already defined with the further actions. Later sources, the newspaper reported that Goldman Sachs has made an application on participation in the placement of Russian sovereign bonds, however, so that it can be revoked at any time by referring to the position of senior managers of the Bank. According to the source, J. P. Morgan Chase has considered the possibility of application, but in the end the Bank decided not to do it, and Bank of America Corp., Citigroup Inc., Morgan Stanley and Wells Fargo & Co. initially said its refusal.
The last time Russia took on the international markets in September 2013, when he sold the paper for $6 billion maturing in 2019, 2023 and 2043 respectively. Since then, Russia has not appeared on the international capital markets because of Western sanctions imposed after the annexation of Crimea, which effectively closed the country to foreign debt markets (though Western sanctions do not apply to hoteistitania).
In early February it became known that Russia has sent 25 requests to foreign banks on the organization of a possible placement of Eurobonds in 2016. Requests, in particular, is directed Barclays, BNP Paribas, Bank of America Merrill Lynch, Bank of China, Wells Fargo, Goldman Sachs, J. P. Morgan, Deutsche Bank, Industrial and Commercial Bank of China, Crédit Agricole, Credit Suisse, Landesbank Baden-Wuerttemberg, Morgan Stanley, Mizuho Financial, Nomura, Citigroup, Societe Generale, Scotiabank, TD Securities, China Construction Bank, Agricultural Bank of China, HSBC, RBC Capital Markets, UBS, UniCredit, as well as three Russian banks: “VTB Capital”, Gazprombank, Sberbank CIB.