Eurobonds and the negative pressure from the United States

Following the European stock exchange and commodity market quotes sovereign Eurobonds significantly “proseli at auction on Wednesday, June 17. Price issuance Russia-30 (YTM 7.75 per cent) decreased by about 1 percentage point – Up to 98.5 per cent of the nominal value. In doing so, its spread to UST has become more than 400 bp for the first time since late May, noted MDM Bank.

Significant changes in Russian corporate bonds are not observed. The negativity of the United States is continuing to push on the market, but the correction has only been viewed in the long segment of the curve Eurobonds, notes Promsvyazbank.


According to the IC “Troika Dialog”, Eurobonds of oil and gas sector fell against the backdrop of falling oil prices on Wednesday. For example, TNK-BP – 17 dropped to 80.75, while TNK-BP – 18 – to 85.25. The price of the recently posted release RSHB-14 (9 per cent) decreased to 101.25, compared with the level of 101,750-101,875 observed a few days earlier. Eurobonds of “Vympelcom” continued to decline, increasing the losses which had incurred in the previous three days. VimpelCom-16 dropped to 87.50. The price of VimpelCom-18 also fell – to 87.50. Evraz-13 dropped in price to 80.375; however, as it is supported by Russian investors, the price did not go below that point.

On Wednesday, the details of the possible new issue of Eurobonds VTB were announced: it will be 7-year notes with a 3-year option “put”. The amount of the loan will make amount 1-2 billion dollars. The coupon is expected to be on the level of 9 per cent. According to experts of MDM Bank, the investors could like the new release.


Meanwhile, analysts of IC “Troika Dialog” think that the expected coupon rate of 9 per cent and a three-year offer for early redemption of the paper will “rise” in the yield curve of traded Eurobonds VTB, without any premium. The News ruined the mood of the market. This is especially in contrast with the new release of Rosselkhoz, which completed the deployment last week. It should be recalled that the volume of applications for the bonds of the latter exceeded the offer five times, and the pent-up demand spilled on the secondary market and contributed to the growth of other securities of the issuer.

Eurobonds and the negative pressure from the United States