Russian corporate Eurobond issues in recent years were toasted with champagne and cigars on both sides of the table. The companies tapped the market for relatively long-term, cheap money, while the bondholders enjoyed significantly higher yields than their home markets could offer. Russia’s banks refused all invitations because the cost of money was too high. But the relentless rise of the rouble against the dollar and falling yields mean they now want to join the party.
Russia’s first post-crisis bank bond was issued by Gazprombank, a daughter company of state-owned gas monopoly Gazprom, with a two-year E200m bond at 9.67% yield. Gazprombank took another gamble this year, uncertain of how international capital markets would receive a Russian Eurobond, but its four-year $300m tap was one-and-half times oversubscribed with a low yield of 7.25%.
