Russia to Offer 10 Billion Rubles of Bonds as Yields Decline

Russia will offer 10 billion rubles ($287 million) of bonds as falling borrowing costs prompt the Finance Ministry to sell its first debt in more than a month.

The government will tender the notes due August 2023 at an auction tomorrow, according to a statement on the ministry’s website today. The yield on the bonds has declined 73 basis points in the last six days to 8.95 percent as of 4:21 p.m. in Moscow.

Russia hasn’t placed any bonds since the start of April and canceled its last auction on April 23 due to a lack of “adequate” bids, according to the ministry. Borrowing costs fell after President Vladimir Putin called on May 7 for east Ukraine separatists to delay votes on independence, easing concern the U.S. and Europe will impose tougher sanctions.

“The long end of the sovereign debt curve has approached the level of 9 percent, which serves as an explicit indicator of the Finance Ministry’s readiness to sell,” OAO Rosbank analyst Evgeny Koshelev said in an e-mailed note before the ministry’s announcement.

Russia has sold 45 billion rubles of bonds since the start of the year, compared with a plan to raise 425 billion rubles. The ministry canceled eight auctions in 2014 and declared two void due to a lack of bids.

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

To contact the editors responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net Alex Nicholson, Daliah Merzaban

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