RT.com
25 Jan 2023, 11:43 GMT+10
Some firms have opted to substitute their eurobonds to ruble debt, the outlet has found
Russia's biggest companies - including unsanctioned ones - are "bypassing Wall Street" for servicing their outstanding debt following Western sanctions that broadly disrupted critical financial operations needed to keep bonds functioning, Bloomberg reported on Monday.
Restrictions have complicated a large number of financial processes for servicing bonds even if a borrower hasn't been targeted by sanctions, the outlet said. Companies and investors now search for alternatives, including swaps, buybacks and direct payments to bondholders.
Some companies like fertilizer producer Uralkali, miner Norilsk Nikel and metals giant Metalloinvest have opted to change bond documentation and pay the debt directly to investors in rubles, the outlet said. The country's energy major Gazprom and one of the world's largest steel producers, Magnitogorsk Iron & Steel Works PJSC, have swapped some of their eurobonds for ruble debt.
Gazprom Deputy Chairman Famil Sadygov told Bloomberg that replacement bonds were "the most reliable way" to service debt given the restrictions on financial infrastructure. He noted that holdings of ten of the bonds have already been substituted and another 12 will be replaced by the end of March, adding that Gazprom pays coupons on both the swapped Russian bonds and the remaining international bonds.
Following EU sanctions, Europe's two major central depositories - Euroclear and Clearstream - have only been processing transactions verified by paying agents. The clearing houses have been reluctant to process corporate actions, forcing companies to find ways to bypass European depositories.
Companies have realized that sanctions have disrupted so many processes needed to keep bonds that it's become necessary to take them out of the market.
A portfolio manager at Armbrok investment company, Dmitry Dorofeev, told Bloomberg that "in a couple of months everything is going to be bought out" by local investors, adding that "Russian companies will replace bonds and return to Russia."
Russia's international corporate bond market declined by about $12.7 billion from $85.6 billion since the imposition of Ukraine-related sanctions on Moscow, according to the outlet.
For more stories on economy & finance visit RT's business section
(RT.com)
Get a daily dose of Japan Herald news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Japan Herald.
More InformationHONG KONG: China has fired back at the European Union in an escalating trade dispute by imposing new restrictions on medical device...
New Delhi [India], July 11 (ANI): Vice President Jagdeep Dhankhar urged Indian businesses to expand globally, not only in markets but...
Representatives of women's organizations and networks that were part of the first delegation of gender experts at the talks in Havana...
(Photo credit: Joe Nicholson-Imagn Images) Tobin Heath, a two-time Olympic gold medalist and World Cup champion with the United States...
London [UK], July 11 (ANI): Following a solid day with the ball, which included two prized wickets of openers Ben Duckett and Zak Crawley,...
London [UK], July 11 (ANI): Following the end of the first day's play during the third Test against England at Lord's, Indian all-rounder...
LONDON, U.K.: Physically backed gold exchange-traded funds recorded their most significant semi-annual inflow since the first half...
AMSTERDAM, Netherlands: Some 32 percent of global semiconductor production could face climate change-related copper supply disruptions...
NEW YORK, New York - U.S. stocks rebounded Tuesday with all the major indices gaining ground. Markets in the UK, Europe and Canada...
NEW YORK CITY, New York: Financial markets kicked off the week on a cautious note as President Donald Trump rolled out a fresh round...
RIO DE JANEIRO, Brazil: At a two-day summit over the weekend, the BRICS bloc of emerging economies issued a joint declaration condemning...
LONDON, U.K.: This week, BP appointed Simon Henry, former Shell finance chief, to its board as a non-executive director effective September...