MinFin discussing substitution of sovereign Eurobonds, could begin issuing 'substitute' bonds before end of year

ST. PETERSBURG. April 28 (Interfax) - The Russian Finance Ministry is considering the possibility of substituting sovereign Eurobonds with local debt securities and may start issuing 'substitute' bonds by the end of the year, Finance Minister Anton Siluanov told reporters.

"Now we are focusing on the issue of 'substitute' bonds and have agreed with the business that we will make a decision that all companies that issued Eurobonds will have to issue 'substitute' bonds, and if there are reasons to apply other ways of calculation - through our subcommittee," Siluanov said.

"Now we are focusing on the issue of 'substitute' bonds and have reached agreement with business that we will make a decision that all companies that issued Eurobonds will have to issue 'substitute' bonds, and if there are reasons to apply other ways of calculation - via our sub-committee," Siluanov said.

The same mechanism is being considered for government bonds - the Finance Ministry could replace Eurobonds with "domestic securities, OFZ, pegged to the currency, the yield, which is now circulating in foreign markets," he said. "Of course, these will be ruble bonds, but they won't differ in their characteristics [from Eurobonds]. This is even important for the development of our market, market expansion, there are such proposals, we are discussing them with market participants," Siluanov said, noting that by the end of the year, the Finance Ministry could begin issuing such "substitute" securities.

The Russian Finance Ministry late last year proposed to prescribe in the budget the option of exchanging sovereign FX-denominated Eurobonds in 2023 for new federal loan bonds with par value of up to 800 billion rubles.