VEB Eurobond on Hold Amid Turbulence Until Sovereign Taps Market

Vnesheconombank, Russia’s development bank and pension assets manager, postponed a planned sale of dollar-denominated Eurobonds until the autumn, citing “negative” markets.

The state lender known as VEB plans to offer $1 billion to $1.5 billion of bonds with maturities of 10, 15 or 30 years, Deputy Chairman Alexander Ivanov told reporters in Moscow. THe yield on VEB’s Eurobonds due 2020 jumped from a six-month low of 3.533 percent on May 9 to 6.006 percent on June 24. It was down three basis points at 5.10 percent at 5:51 p.m. in Moscow.

VEB postponed marketing meetings planned for the start of July and will hold back a sale until the government returns to the foreign debt market, Ivanov said. Russian bonds and stocks joined a global rout last month triggered by U.S. Federal Reserve Chairman Ben S. Bernanke’s comments that the central bank may scale back its bond-buying program.

“Our goal isn’t to place at any price,” Ivanov said. “The general background is negative and we are waiting for the Finance Ministry’s decision.”

Russia is weighing the sale of as much as $7 billion in Eurobonds with maturities of five and 10 years depending on market conditions, Finance Minister Anton Siluanov said June 21.

To contact the reporter on this story: Vladimir Kuznetsov in Moscow at vkuznetsov2@bloomberg.net

To contact the editor responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net

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