Moiseyev: Eurobonds risky instrument for raising financing
MOSCOW. April 19 (Interfax) - Eurobonds are a dangerous instrument for raising money for Russian companies due to currency risks, Deputy Finance Minister Alexei Moiseyev said.
"I cannot agree that Eurobonds are a good instrument for raising money. The crisis that took place in 2014-2015 showed that even for companies with significant export revenue, Eurobonds are a dangerous instrument for raising money," Moiseyev said at a Higher School of Economics conference on Tuesday.
There have been times when hedging currency risks was quite cheap, but those hedges have not always worked the way the companies hedging the risks expected, he said.
"Some major companies did not protect themselves. On the contrary, they lost money because of the way they hedged risks. I am not saying there is no reason to hedge. If you have currency risks, of course they must be hedged but firstly, this is very expensive and secondly, not always effective," Moiseyev said, noting that this is the connected with the fact people try to save money, and therefore allow themselves leave some of the risk uncovered, which subsequently proves costly.
"I believe that the main goal is not to attempt returning to the international markets. I think that we have a unique chance to finally replace the foreign markets that everyone has gotten used to and everyone is comfortable with, with our own market, which is also very comfortable," he said.
Moiseyev said it has been a long time since he heard complaints from anyone on the financial market that Russia treats investors, issuers badly, or that people experience difficulties from the standpoint of clearing procedures, depositaries.
"It has even turned out to be a success that the colossal work performed jointly by the Central Bank and the government over the last few years, to reform the infrastructure of the financial market, coincided with the time when the foreigners stopped enticing and inviting our issuers. Now we are seeing a situation where there is demand and offers. Therefore, I believe that the idea the Russian market is stagnating is incorrect. I believe that considering our economy is contracting, the market is developing well," Moiseyev said.
The main goal at present is to fill up this infrastructure with money, meaning funds from the public, the NPFs [nongovernmental pension funds] and insurance companies, he said.
