Russia 2027 OFZ Bonds Climb First Time in Six Days as Sale Axed

Russia’s ruble bonds due 2027 climbed for the first time in six days after the government shelved an auction for 9.9 billion rubles ($329 million) of the securities tomorrow, citing market conditions.

Yields on the OFZ bonds dropped two basis points, or 0.02 percentage point, to 7.08 percent as of 2:14 p.m. in Moscow. The ruble was little changed against the central bank’s target basket of dollars and euros and was steady versus the dollar at 30.1120.

The Finance Ministry canceled its scheduled sale of 2027 bonds “after analysing market conditions,” according to a statement on its website today. It boosted the amount of seven-year ruble securities on offer tomorrow to 30 billion rubles from 20 billion, setting yield guidance of 6.51 percent to 6.56 percent.

The government sold 43 percent of the 10-year securities it offered at an auction last week, its first sale since Euroclear Bank SA began direct settlement of over-the-counter transactions for foreign investors on Feb. 7.

Ruble-denominated government debt rallied in the second half of 2012, lowering the yield on the 2027 notes by 225 basis points from a 52-week high in June to a record low on Jan. 10 on bets that easier foreign access would boost demand.

Yields climbed in January and February due to “profit taking” around the Euroclear announcement, Maxim Korovin and Anton Nikitin, analysts at VTB Capital in Moscow, said by e-mail.

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