: :inin Kyiv (EET)

Russia said to face eurobond setback as many banks shun deal


Russia has not been able to line up a suitable lead manager for a planned $3 billion eurobond because of U.S. and European Union pressure on major banks not to participate, meaning the high-profile sale is likely to be delayed or even shelved, senior officials said, according to Bloomberg.

Only two Western banks are still interested in helping sell the bond, one of the officials said, speaking on condition of anonymity, according to Bloomberg.
Another official said Russia so far hasn`t been able to find a bank big enough to successfully lead the issue that would be willing to participate, despite sending out requests for bids to about two dozen major banks earlier this year.

Relying on Russian banks could deter western investors, since the country`s main lenders are subject to U.S. and EU sanctions.
A prominent underwriter is important for the Kremlin but pressure on banks from the U.S. and EU proved stronger than the government expected, the official said, according to the report.

Facing a sharp drop in budget revenue because of plunging oil prices, Russia is scrambling to find ways to cover a widening budget deficit. In addition to the bond issue, the government is planning to sell stakes in some major state companies and hoping to draw western banks as consultants later this year, according to Bloomberg.
One senior official said the government had been hoping to use the eurobond sale to show that Russia could still borrow even amid sanctions. In addition, while the $3 billion planned offering would cover only a relatively limited part of the deficit, it would bring much-needed foreign currency, which is in short supply now with export revenue plunging, the official said.

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