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Emerging Europe – Russia: Unsecured, untied and not a bond in sight

International banks recently put up an unsecured loan for a Russian borrower with a parent on the US sanctions list. Has the loan market for unsanctioned investment-grade Russian borrowers just got broader, deeper and potentially cheaper?

Vladimir Putin binoculars-R-600
Vladimir Putin looks to the US for mutual backslapping in the global media

A $500 million five-year unsecured loan to a Russian borrower with a parent on the US goods, services and technology sanctions list would have been laughed out of European bank credit committees six months ago. The deal closed in November.

Lead arranged by Intesa Sanpaolo, Natixis, Mizuho, UniCredit, VTB Bank, ING, Raiffeisenbank of Russia and Raiffeisen International for Soyuzneftegaz Vostok, an indirect but wholly owned subsidiary of US sanctioned Lukoil, the unsecured loan is the strongest signal to date that western bank appetite for Russian borrowers, particularly those with commodity-linked cash flows, is back.

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