Russia

Several Russian companies are considering issuing Eurobonds following the successful placement of nearly $2bn of corporate paper from the country this month, according to analysts.

Mobile TeleSystems (MTS) has launched a tender offer on its 2020 bonds on Wednesday, becoming the latest Russian corporate to buy-back its dollar debt.

Three stellar trades last week from Russian corporates did more to prove that the Russian bond market is open for business than the much-hyped $1.75bn sovereign issue. But this was no surprise as investors had been scrambling to get their hands on Russian corporate debt for two years.

Bonava, the Swedish housing developer, has obtained a Skr2.7bn ($325m) loan that backs its listing on the Nasdaq Stockholm exchange.

Sberbank CIB, the corporate and investment banking business of Sberbank, has appointed a new head of its global markets department.

Sovcomflot, Evraz and NLMK issued nearly $2bn of bonds between them this week, and strong demand, especially from local investors, led to dramatic price tightening.

Three Russian corporates had no problems accessing the dollar market this week, setting a strong precedent for the $40bn worth of redemptions in 2016 and 2017.

After a stellar book for Novolipetsk Steel's (NLMK) new issue on Wednesday, trades from Sovcomflot and Evraz on Thursday morning will test the true level of investor appetite for Russian corporate debt.

Despite the recent rush of Russian corporate bond activity — three new issues are expected this week — the sector still has its outliers with Far Eastern Shipping Company (Fesco) receiving a downgrade from Fitch on Tuesday to restricted default after missing a coupon payment last week.

Novolipetsk Steel’s book build was a riot on Wednesday morning as investors clamoured to get hold of paper from the first of the three Russian corporates carrying out liability management exercises this week.

Sberbank believes around $20bn of the $30bn of non-distressed Russian corporate Eurobonds maturing in 2017-2018 could be bought back or replaced with new, longer-dated bonds in the near future.

Just a week after Russia’s contentious return to the international bond market with its first sovereign bond since September last year, three of the country’s biggest companies are set to bring new tests of bond investors’ appetite for Russia. However, rather than being encouraged by the sovereign’s return, the trio are keen to get into the market before the Federal Reserve raises rates and dollar borrowing costs increase. Virginia Furness reports.