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 India Gazette 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 India Gazette.
More InformationNEW YORK CITY, New York: Bitcoin surged to a new all-time high this week, buoyed by growing institutional interest and a wave of pro-crypto...
SHENZHEN, China: As global chip competition intensifies, Huawei Technologies is exploring new markets in the Middle East and Southeast...
LONDON/NEW YORK CITY: American grocery bills may be headed higher as coffee and orange juice prices face upward pressure from new tariffs...
BATTLE CREEK, Michigan: In a major consolidation of iconic food brands, WK Kellogg has agreed to be acquired by the owner of Ferrero...
WASHINGTON, D.C.: Filmmaker Peter Jackson's lifelong fascination with the extinct giant New Zealand flightless bird called the moa...
NEW DELHI, India: India has submitted a revised proposal to the World Trade Organization (WTO) in Geneva to implement retaliatory tariffs...
NEW DELHI, India: India has submitted a revised proposal to the World Trade Organization (WTO) in Geneva to implement retaliatory tariffs...
London [UK], July 15 (ANI): England Test captain Ben Stokes is 'all for' the aggression and tempers that flared during the third Test...
Bhubaneswar (Odisha) [India], July 15 (ANI): The All India Institute of Medical Sciences (AIIMS) Bhubaneswar confirmed the death of...
Washington DC [US], July 15 (ANI): US President Donald Trump reiterated his claim on Monday (local time) that he stopped the escalation...
Suryapet (Telangana) [India], July 15 (ANI): Telangana Chief Minister A Revanth Reddy on Monday challenged former Chief Minister and...
Dubai [UAE], July 15 (ANI): Madhya Pradesh Chief Minister Mohan Yadav, on Monday, lauded the Indian armed forces for conducting Operation...