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| Russia’s combined Euro and domestic bond issuance in the 2010 budget |
Finance minister Alexei Kudrin visited London in November at the head of a delegation that included senior officials from the Russian central bank and finance ministry as well as leading business figures. In addition to meeting UK government officials the delegation held talks with fixed-income investors to update them on the country’s economic track record and Eurobond issuance plans in 2010.
The Russian government is likely to launch its first Eurobond since 1998 in the first quarter of next year as part of its efforts to cover its budget deficits between 2010 and 2012. The initial draft of the 2010 budget allows for almost $18 billion-worth of Eurobonds next year, alongside upwards of $26 billion of rouble bond issuance in the domestic markets.
Modesty
However, according to Alexander Kudrin, head of fixed-income research at Russian investment bank Troika Dialog in Moscow, actual issuance levels are likely to be much more modest. He forecasts Eurobond issuance of about $7 billion and domestic fundraising at $20.5 billion.
"Massive borrowing would not only push up interest rates in such a way that it would increase the cost of borrowing for the government, but it would also limit the ability of private issuers to tap the public debt markets," noted Kudrin in a report.