Russia issues yuan-denominated bonds for the first time

VTV.vn - In December, the Russian Ministry of Finance will begin issuing OFZ bonds in yuan. The issuance volume has not yet been determined.

Yuan and ruble. (Source: businesspostbd.com)

Federal loan bonds (OFZ, government debt bonds) in yuan will be issued on the Moscow Stock Exchange.

The Russian Ministry of Finance revealed some parameters of the upcoming issuance: Investors will be offered two tranches of federal loan bonds with fixed coupon rates, denominated in yuan, with maturities ranging from three to seven years, a coupon maturity of 182 days, and a face value of 10,000 yuan (about 114,000 rubles).

Subscriptions for the bonds are expected to open on December 2. The Ministry of Finance will determine the issuance volume and coupon rate depending on demand. The technical issuance is expected to take place on December 8, the Ministry of Finance said.

Bonds, as well as payments, will be issued in both yuan and rubles. Investors will choose the currency themselves. Gazprombank (placement agent), Sberbank and VTB Capital Trading will act as placement organizers.

The possibility of issuing yuan-denominated OFZs, also known as Panda bonds, has been discussed in Russia since 2015. In the fall of 2016, a representative of the Ministry of Finance announced that the first issuance worth $1 billion would take place by the end of the year, but the plan did not come to fruition.

The last time the Russian Finance Ministry offered traditional Eurobonds to investors, rather than alternatives, was in May 2021. In March 2023, Prime Minister Mikhail Mishustin noted that Russia was considering issuing OFZs and other instruments in the currencies of friendly countries.

According to some sources, the Ministry of Finance plans to issue four batches of yuan-denominated government bonds, worth a total of up to 400 billion rubles, with maturities ranging from three to 10 years.

The Ministry of Finance estimates that this year's budget deficit will reach 5.7 trillion rubles, down from the initial target of 1.2 trillion rubles. As of the end of September, oil and gas revenues were down 20 percent, customs duties were down 19 percent, and non-resource tax revenues, although growing, were still behind schedule. According to budget adjustments, value-added tax revenues will be 1.19 trillion rubles lower than expected, corporate income tax will be down 167 billion rubles, and recycling fees will be down 440 billion rubles.

Source: https://vtv.vn/nga-lan-dau-tien-phat-hanh-trai-phieu-bang-dong-nhan-dan-te-10025111218132686.htm