What Russia bondholders should know about GOT

Buyers of Russia sovereign bonds could get burned as the US contemplates new sanctions against the country. But it seems they and Russia's public debt officials have not made it to the end of HBO's Game of Thrones. Had they done so, they would have learned a valuable lesson. They must do so quickly.

  • By Francesca Young
  • 04 Jun 2019
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If you are also not up to date with the series, then beware that spoilers follow.

In comments made last week, the Russian public debt department seemed to be styling itself as Cersei Lannister from the hit television series Game of Thrones, which concluded last month.  

Cersei believes herself safe from the woman who would take her throne, Daenerys Targaryen, and the latter's pet dragon, because she surrounds herself with innocents in the Red Keep in the city of King's Landing. 

Surely, she supposes, Daenerys won't turn her scaly, fanged fire breather on scores of innocent civilians just to get to her.

Russia, similarly believes itself to be safe from US sanctions if it surrounds itself with US bondholders. Konstantin Vyshkovsky, director of the department of public debt and public financial assets, told the Moscow Times last week that he was eager to issue on the international market to discourage the US from imposing more sanctions.

The final series of Game of Thrones infuriated and irritated a lot of fans but at least they watched until the end. Those responsible for planning Russia's debt issuance seem only to have made up until the antepenultimate episode and have not yet seen how a leader of the free with hair the colour of straw and control of vast power can do the unthinkable.

Daenerys Targaryen, first of her name, queen of the Andals and the first men, breaker of chains and mother of dragons did not show much aversion to collateral damage as she burned the Red Keep, as many innocents as she could aim her flapping flamethrower at and more besides. You have to wonder if Donald Trump, first of his name, commander in chief and 45th president of the United States will think any different.

Not everyone is convinced that the US authorities will be so kind to investors who have willingly bought Russian debt knowing full well the tensions between the two countries. They believe US investors getting burnt is a price their government will pay when slapping on more sanctions.

There is some hope, however, that bondholders will escape medium-rare rather than chargrilled as the sanctions on Russian sovereign debt being discussed are about prohibiting the raising of more debt — similar to the sanctions already on several Russian state-owned companies — rather than forcing investors to sell outstanding paper. 

Daenerys showed that she was willing to do whatever it took, no matter how unreasonable that was, to achieve her aims. Looking unreasonable is a tactic Trump has deployed repeatedly in his international negotiations, although it should be said he is yet to unleash a dragon on a bunch of humble townsfolk. 

Russia will hope investors believe that just like the Lannisters, it always pays its debts — after all 1998 was a long time ago. But when there's an angry, powerful egomaniac on the other side of the argument with form for going beyond what is usually acceptable, it would be a brave soul who bets client money against the catastrophic.

  • By Francesca Young
  • 04 Jun 2019

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 JPMorgan 255,554.16 1146 8.47%
2 Citi 232,791.64 969 7.71%
3 Bank of America Merrill Lynch 199,027.99 814 6.59%
4 Barclays 184,008.42 751 6.10%
5 HSBC 144,676.82 801 4.79%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 BNP Paribas 31,283.69 132 7.81%
2 Credit Agricole CIB 27,347.56 115 6.83%
3 JPMorgan 23,350.32 62 5.83%
4 Bank of America Merrill Lynch 22,698.09 61 5.67%
5 UniCredit 19,891.92 110 4.97%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 JPMorgan 8,160.55 49 10.10%
2 Morgan Stanley 7,744.92 38 9.59%
3 Goldman Sachs 6,966.15 37 8.62%
4 Citi 5,856.44 44 7.25%
5 UBS 4,820.17 25 5.97%