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New Eurobonds of the Ministry of Finance of the Russian Federation with the support of the Euroclear

06 December 2019

New Eurobonds of the Ministry of Finance of the Russian Federation with the support of the Euroclear

With the new sanctions from the United States, which was introduced in August 2019, the Ministry of Finance of the Russian Federation preferred to place sovereign Eurobonds of the Russian Federation with the assistance of the international settlement system Euroclear, reported Deputy Finance Minister Vladimir Kolychev. Further, he noted that “it is not only banks can not buy, but that creates a major uncertainty - it is impossible to facilitate primary placement”.


Klychev claims that the Finance Ministry can not understand whether the organization Euroclear, which can assist in deployment of new releases of the Russian Federation. The Deputy Minister says - “it has a double-structure of sanctions. First, who is covered by sanctions. In this case, they did not apply to Russia, and us banks. And second, what operations. And here Euroclear, he believes that the implementation of the services of a custodian is promoting or not promoting? Here are quite technical issues we want to discuss with them”.


The Ministry considers if the international clearing system will refuse to participate in offerings of the Russian Federation, remains the only infrastructure National settlement Depository. Kolychev explained - “in this case, when Euroclear drops out, leaving only the NSD, and then the banks - foreign investors will need to open accounts at NSD, all used via Euroclear to work day to day, they so comfortable. This, of course, the big limitation is, it will be necessary to all accounts they had, they want to bother with it, do not want to, hard to predict”.


The head of the debt Department of the Ministry of Finance Konstantin vyshkovsky has already talked about the fact that the meeting with representatives of Euroclear to be held at the end of December 2019. Indeed, in accordance with a new with the US sanctions, which came into force on 26 August, all your favorite us investors will no longer be able to buy sovereign bonds of Russia, at least in the primary market. Such innovations significantly restrict the Treasury from the good investors share in the foreign market.


Depending on the demand from investors will depend on the number of placed new Eurobonds. “If we understand that the demand will not be on Eurobonds, robust demand, which will be from foreign investors, and thus that they are not subjected to some additional risks, then, of course, as we can accommodate,” said Kolychev.

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