Putin: concerned
about inflationRUSSIA’S SOVEREIGN presence on international debt markets is getting smaller and smaller but Russian corporate debt is a rapidly growing sector. CSFB’s debt capital markets team recently undertook an analysis of the market, finding that Russia’s corporate Eurobond debt is now worth as much as $30 billion, accounting for 57% of the total Russian debt market. That makes it bigger in absolute terms than the corporate Eurobond volumes of most other emerging markets.
Of that, about 60% is debt issued by state-owned companies, such as Gazprom, Sberbank and Vneshtorgbank. Sofia Sool, vice-president of debt capital markets at CSFB, says: “Issuance by these entities is increasingly being taken by investors as a proxy for sovereign debt. As the amount of sovereign debt gets smaller, the demand for their debt gets bigger.”
The volume of Gazprom Eurobond new issues, for example, rose from $2.7 billion in 2004 to $5.3 billion in 2005, including $1 billion in new issues by Gazprombank. Spreads on Gazprom’s 2013 issue tightened by 120 basis points in 2005. Vneshtorgbank’s new Eurobond issuance rose from $1.6 billion in 2004 to $2.4 billion in 2005.