A slew of emerging market loan bankers have said that they expect that the latest set of sanctions the US has slapped on Russia will bang the final nail in the coffin of an already sickly Russian syndicated loans market.
As bank compliance departments ramp up their opposition to lending to the country, loans bankers fear a loss of business. But there is no need to panic.
The threat of sanctions that loomed over the markets until last week has proved false as the most powerless set of proscriptions possible emerged. Some thought they were so benign that they were evidence of US president Donald Trump shielding Russia from worse than it would have faced had US Congress dictated the terms.
Secondary bond trading and the rouble held in as a result. The country's bonds have weakened in line with the wider market but no more. Fitch, for its part, even upgraded Russia one notch to BBB shortly after the sanctions were announced. Moody’s continues to rate the country Baa3 and S&P rates it BBB- — all investment grade.
Analysts are adamant that the risks of owning Russian debt have not increased. The country has plenty of cash. It's fiscal policy and foreign exchange reserves are the envy of much of the rest of the world. There are still unsanctioned corporates and banks to plough money into.
International banks may well take an ultra-cautious approach to Russia, not wanting to fall foul of the US government. But there really is no need and they risk missing out on business if they do.