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Russia claws in another $3.75 billion

Issuer: Russian Federation

Amounts: $1.25 billion; $2.5 billion
Maturity: 5-year; 30-year (10-year put)

Launched: June 4; June 18

Bookrunners: Goldman Sachs; JP Morgan; Deutsche Bank

It's the last week in May. Russia's economy is in turmoil again. Wages need paying, and still not enough taxes are being raised. The rouble falls to its lowest level against the dollar, and overnight interest rates are trebled in response. The only thing left to come is another government crisis.

Three weeks later, and Russia has pulled it off again. The economy is still in trouble, the IMF appears to have suspended delivery of a $670 million loan (or was that a misinterpretation of a press release?), yet Russia's ministry of finance has managed to raise $3.75 billion on the international capital markets. And, if reports are true, a few hundred million more (secretly) through some US banks.

In mid-May, all seemed well. Mikhail Kasyanov, deputy finance minister, and Oleg Buchlemeshev, head of section, international capital markets, had been discussing a straightforward dollar deal, with a roadshow and a syndicate, but the crisis a week later killed that idea. And the government effectively closed itself off from raising money domestically.

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