Morgan Stanley Sees Russian Bond Rout Propelling Buybacks
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Russian companies are set to seize on sliding asset prices to buy back their bonds, helping stem the third-biggest rout in emerging markets, according to Morgan Stanley and Erste Sparinvest.
Steelmaker OAO Severstal and Far East Shipping Co., whose cash piles both amount to 1.1 times short-term debt obligations, are among companies with an “incentive to buy back bonds,” Morgan Stanley said in a report two days ago. Corporate notes slid 5 percent since new U.S. penalties limited access of some Russian companies to dollar funding on July 16, the most after Ukraine and Venezuela among more than 50 countries in the Bloomberg USD Emerging Market Corporate Bond Index.