7 Sep 2010 16:30

Russian MinFin to offer 175 bln rubles in federal bonds in next two weeks

MOSCOW. Sept 7 (Interfax) - The Russian Finance Ministry will offer 65 billion rubles in federal bonds at auctions on September 8 and another 40 billion rubles on September 15 and 70 billion rubles on September 22, continuing a series of substantial local-currency debt offerings that it thinks will attract investors in light of the Central Bank's decision last week to freeze interest rates.

The ministry, which sold an impressive 12 billion rubles or 16% of a bumper OFZ bond offering of 75 billion rubles in the course of two auctions on September 1, will offer 25 billion rubles in 868-day OFZ-PD series 25072 constant coupon bonds maturing on January 23, 2013 at a coupon rate of 7.15% pa and 40 billion rubles in 2,156-day of OFZ-PD series 26203 at 6.9% at two auctions tomorrow.

The ministry expects the OFZ-PD 26023 and OFZ-PD 25072 to yield 7.35%-7.45% pa and 6.16%-6.23% pa, respectively.

The ministry said it would offer 5 billion rubles in shorter 287-day OFZ-PD 25074 series at 4.59% and 35 billion rubles in 1,764-day OFZ-PD 25065 at 6.88% on September 15.

The Central Bank said on September 7 that the Finance Ministry would offer 30 billion rubles in 854-day OFZ-PD 25072 bonds, coupon rate 7.15% pa; and 40 billion rubles in 2,241-day OFZ-PD 26203 bonds, coupon rate 6.9%, at two auctions on September 22.

The Central Bank said on August 31 that it was keeping its refinancing rate at 7.75% pa and indicated that key rates would stay on hold in the coming months.

The government has authorized the Finance Ministry to issue up to 869.3 billion rubles worth of ruble-denominated government securities this year.

Legislation was passed in June that increased the domestic state debt ceiling at end-2010 from 3.353 trillion to 3.727 trillion rubles. The government also raised the cap on ruble-bond issues in 2010 to 1.243 trillion rubles from 869.3 billion rubles.

The Finance Ministry plans to place all budgeted government securities for the domestic market this year, Deputy Finance Minister Dmitry Pankin told reporters at the beginning of July.

Deputy Prime Minister Alexei Kudrin, who is also the country's finance minister, has said on several occasions that the emphasis in government borrowing would shift from external to domestic in 2010.

Russia's public debt in local-currency bonds increased by 415.725 billion rubles (or 29.2%) from 1.421 trillion rubles in 2009.

The Finance Ministry said on September 7 that the debt rose by 203.086 billion rubles or 11.05% to 2.04 trillion rubles as of September 1 this year.

It grew by 66.888 billion rubles or 3.39% in August - its third straight month of growth. The debt rose 3.23% in July and 4.41% in June, and had decreased prior to that.

The debt in OFZ-PD grew 28% to 907.679 billion rubles in the eight months, while the debt in amortized OFZ-AD bonds decreased by 3.8% to 830.156 billion rubles (unchanged in August compared with July). The debt in GSO-PPS constant coupon savings bonds rose 25.8% to 170.415 billion rubles (also unchanged in August) and the debt in fixed coupon GSO-FPS savings bonds was unchanged at 132 billion rubles.