Finance Ministry may offer new Eurobonds in exchange for 2018, 2028, 2030 issues
MOSCOW. Aug 8 (Interfax) - The Russian Finance Ministry may offer investors new Eurobonds in exchange for the issues maturing in 2018, 2028 and 2030, according to an August 4 government instruction that has been published on the official legal information website.
The Eurobond exchange will be conducted at a price no higher than the market value for those bonds. The total face value of the new Eurobonds offered in the exchange will not exceed $4 billion.
The market value of the obligations offered will be determined using Eurobond price data from Bloomberg or, if no data is available on that system, the obligations will be valued using data from the Thomson Reuters system.
All holders of the specified Eurobond issues, including the Central Bank of Russia, will be eligible to exchange them. The exchange will be conducted either via book building or by sending out offers to bondholders by organizations selected by the Finance Ministry for the exchange and replacement.
The final decision on which Eurobond issues to offer in exchange will be made based on the market situation and an analysis of demand on the global capital market, the instruction says. The exchange deals will be transacted on the OTC market.
Russia's 2017 budget stipulates $7 billion in external borrowing, of which $4 billion will be new Eurobonds exchanged for existing issues.
In June, Russia placed two tranches of 10- and 30-year Eurobonds totaling $3 billion.
Finance Minister Anton Siluanov said previously that the Eurobond exchanges would be conducted "closer to autumn."
The Finance Ministry has already selected three agent banks for the exchange and placement of Eurobonds: VTB Capital, Sberbank CIB and Gazprombank . VTB Capital was the sole organizer of the Eurobond placement in June.