23 Nov 2009 16:38

RZD may issue Eurobonds in 2010

MOSCOW. Nov 23 (Interfax) - Russian Railways (RZD) is considering a Eurobond issue in 2010, a source familiar with the company's plans told Interfax.

The bonds would be secured with foreign currency revenue generated by passenger traffic in the CIS and by foreign expediters (denominated in Swiss francs).

The source said the company could expect the Eurobonds to pay 3%-4% annually.

No decision to issue the bonds has been made. "The possibility is only being considered," the source said.

RZD first started to think about Eurobonds in 2004, when it planned to place $500 million worth. Those plans changed several times since then, and the talk in the summer of 2008 was of a $1-billion placement.

RZD put its Eurobond plans on hold when the crisis hit last autumn and decided to focus on ruble bonds, using these for refinancing purposes, in particular costly forex loans.