ZAO Russian Standard Bank became the second issuer in the country to postpone a bond sale in as many days because of rising yields, according to two people with knowledge of the offering.
The lender controlled by billionaire Roustam Tariko delayed the issue because of negative market developments overnight and plans to revisit the market as soon as conditions stabilize, said the people, who asked not to be identified as the information isn’t publicly released. OAO Mobile TeleSystems, Russia’s largest mobile-phone company, shelved a sale of ruble-denominated Eurobonds yesterday, another person said.
The yield on Russian Standard’s existing dollar bonds redeemable by investors in July 2015 jumped to the highest level in more than a month yesterday as Federal Reserve Chairman Ben S. Bernanke triggered speculation U.S. stimulus may be tapered. A slump in Russian government Eurobonds due April 2042 lifted yields nine basis points, or 0.09 percentage point, to 4.723 percent yesterday, the highest level since the start of April, data compiled by Bloomberg show.
“The main factor was the jump in volatility in the markets,” Dmitry Poliakov, an analyst at Sberbank Investment Research in Moscow, by e-mail today.
Russian Standard Bank’s press-service didn’t immediately respond to an e-mailed request for comment. The bank had planned 10 1/2 year subordinated dollar bonds callable in 5 1/2 years at a yield of around 10 percent, according to one of the people. MTS sold $500 million of 10-year bonds at 5 percent before postponing placement of the ruble-denominated Eurobond tranche, according to people familiar with the plans.
Russia’s government was planning to pick organizers for a Eurobond sale to raise as much as $7 billion as soon as this week, Deputy Finance Minister Sergei Storchak said May 16.