Russian loans rocked: UK banks flee Rosneft-linked deal as sanction fears loom

Michael Turner

June 05, 2014 06:45 pm

Rosneft — The Kremlin wall, towers and cathedrals are reflected on a nameboard of state-owned oil company Rosneft's headquarters, Moscow, Thursday, Dec. 23, 2004. President Vladimir Putin on Thursday strongly defended the purchase of Yukos oil assets by a state-owned company, saying the state was protecting its interests in moving to get control of the one of the biggest production facilities in Russia. In an apparently secret deal, the state-owned Rosneft oil company bought BaikalFinansGroup, the obscure company that purchased Yukos' most important production unit in an auction Sunday. The Yuganskneftegaz subsidiary was sold for US$9.3 billion (euro7 billion), half of what foreign auditors say it was worth. (AP Photo/ Mikhail Metzel) | MIKHAIL METZEL/ASSOCIATED PRESS

A loan of around $2bn linked to Russian state owned oil firm Rosneft suffered a double blow this week when half of the mandated lead arranger group fled the deal. Both HSBC and Lloyds dropped out showing that although Russian bonds may be about to enjoy a comeback, the crisis in Ukraine is keeping the Russian loan market under pressure, writes Michael Turner.

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Michael Turner