22 Mar 2019 19:29

Eurobonds rise moderately in week, MinFin places $3.85 billion in new bonds

MOSCOW. March 22 (Interfax) - Prices for most Russian Eurobond issues rose moderately in the past week on expectations of a relatively soft monetary policy on the part of central banks worldwide, especially the U.S. Federal Reserve.

The rise in prices of U.S. Treasuries accelerated, with sovereign spreads widening somewhat.

Taking advantage of the favorable market situation, the Russian Finance Ministry placed two tranches of Eurobonds worth $3 billion and 750 million euros, respectively, on March 21.

In the week as a whole, the benchmark Russia-30 bond rose 0.23% in price to 111.25%. Spread between these and three-year U.S. Treasuries widened 7 basis points to 127 bps.

The 2043 bond grew 0.46% in price, with yield down 3.5 bps to 5.01% per annum; the 2042 bond rose 0.51% - spread between these and UST with the same maturity widened 12 bps to 244 bps; and 2047 rose 0.87% to 100.11%, yielding 5.24%, down 6 bps.

The 10-year Eurobond maturing in 2027 rose 0.6% to 99.82%, with yield down 8 bps to 4.28%; the 2026 bond rose 0.36%; and the 2023 bond rose 0.21% with spread widening 11 bps to 149 bps.

The Russian Eurobond market could correct down slightly in the coming week amid a forecast downturn in the international capital markets and continued sanctions risks, the Interfax Center for Economic Analysis said.

The international markets could come under pressure from concerns about a global economic slowdown as indicated by the macroeconomic data published on Friday, and by the ongoing uncertainty over trade negotiations between the United States and China. The sanctions topic remains a downside for Russian bonds. However, there are upsides, notably the fact the Russian budget and current account are both in surplus.