Ruble bonds might be placed simultaneously on domestic, foreign markets - Pankin
MOSCOW. Feb 17 (Interfax) - Russian Eurobonds denominated in rubles will quite probably be placed on domestic and foreign markets simultaneously, Deputy Finance Minister Dmitry Pankin said.
"We have not made a final decision, but there are substantial arguments in favor of going to domestic and foreign markets simultaneously," Pankin told Vesti 24 television on Tuesday.
Bank and investment analysts all say that the first half of 2010 "is a very convenient window for borrowing on international financial markets," he said.
The situation in the second half of the year will be less favorable, since U.S. interest rates might already begin to rise and many corporate and sovereign borrowers in Europe will be placing securities.
"That is, the window will exist in the first half of 2010. But at the same time the markets are highly volatile and the challenge is to catch the right moment," he said.
An advantage for Russia is that "we can choose the time when we go to market. We don't have a pressing need to borrow in April, May or June. We have sufficient reserves, the Reserve Fund, the National Welfare Fund. We can use them."
"We can make our move at the exact moment when we consider conditions are most favorable for foreign borrowing," Pankin said.
The Finance Ministry deliberately selected those banks for the placement that proposed the most aggressive strategy for a placement on the foreign market, who saw opportunities to place the bonds at prices below those quoted currently, he said.
It's still too early to specify the maturities of the bonds and where and on what basis they will be registered.
One goal of the borrowing is to lower the interest rate benchmark for Russian corporate borrowers so that companies are able to raise money more cheaply.
Russia must take care to space out offerings on the foreign market, so that it is not trying to place sovereign debt a week after several of the big state companies have placed bonds, he said.
Pankin noted that there are other borrowing options. "If we are offered attractive interest rates and the loans are not accompanied by the conditions that normally attach to loans from the World Bank, for example, we may examine that option as well," he said.
"We believe that we are no longer in a position where we have to borrow from the international organizations and meet some kind of provisions. We are now able to borrow on purely market principles. Investors trust us and we hope demand for Russian bonds will be very high," Pankin said.