VEB Says Eurobond Issuers Face ‘Serious Losses’ on Coupon Tax

Russian Eurobond issuers face “serious losses” if they are taxed on coupon payments made through offshore vehicles, given the weak domestic market for long-term borrowing, said VEB Chairman Vladimir Dmitriev.

“Believe me, banks will take a consolidated stand on that proposal,” Dmitriev said in an interview today in Davos, Switzerland. “It’s important to understand what is behind it, who will compensate them for the 20 percent loss.”

VEB, the state development bank, is considering sales of $8 billion of debt this year, Dmitriev said. The lender may sell “a few hundred million dollars” of notes in the Russian market this quarter, he said.

To contact the reporter on this story: Lyubov Pronina in Davos, Switzerland at lpronina@bloomberg.net

To contact the editor responsible for this story: Torrey Clark at tclark8@bloomberg.net

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