29 Jan 2010 11:29

Russia could enter external credit markets as early as H1 2010

DAVOS. Jan 29 (Interfax) - Russia could enter the external credit market in the next few months.

"Yes, of course," said Russian Deputy Prime Minister and Finance Minister Alexei Kudrin at the economic forum in Davos, when asked by journalists whether Russian Eurobonds might be placed in the first half of 2010.

"We will be placing throughout the year in favorable market conditions. It will not be just one tranche," he said.

Asked whether Russia would borrow the entire budgeted amount [$17.8 billion], he said: "Given the current macroeconomic forecast: yes. For now all of it is planned."

The entire Reserve Fund, which totaled 1.8 trillion rubles as of January 1, will be exhausted this year, Kudrin said. The greater part - 1.14 trillion rubles - will be expended in the first half. "In the second half there will be more funds from borrowing, both domestic and external. Right now the fund will be used more, then borrowing," he said.

Borrowing might occur this year with oil priced at $70 per barrel, even though the 2010 budge assumes oil priced at $58.

Deputy Finance Minister Dmitry Pankin said previously that $17.8 billion is the maximum level, but "we most likely won't reach" that figure.

At the beginning of this week, Pankin told Interfax a first tranche of Eurobonds might be issued totaling $5 billion. A decision on the organizing banks for placement of the first tranche will be made no sooner than the middle of next week. The Finance Ministry plans to select between two and four lead managers.