Will Russia issue Eurobonds in euros once again?
Russia's Finance Ministry is planning its first euro-denominated bond in half a decade as Moscow strives to reduce dependence on the U.S. dollar.
The Eurobond settlement date is scheduled for December 4, 2018, the bond's maturity date is Dec. 4, 2025, the financial market source said. The Eurobond will carry a yield of around 3%, according to the source.
The exact size of the issue was unclear; the source described it as "benchmark." VTB Capital is the sole bookrunner of the issue, Reuters reported.
Russia has chosen the European currency to issue its Eurobond amid uncertainty about whether the U.S. will impose sanctions on holdings of Russian state debt.
Even though the market was pricing such sanctions risks, especially penalties on holdings of new Russian debt, foreigners still own a large chunk of Russian bonds. The share of Eurobonds held by foreigners stood at 46.3% as of October 1.
In September, Russian Finance Minister Anton Siluanov said market volatility was too great to tap the Eurobond market. Weeks earlier, the ministry had not ruled out a euro-denominated Eurobond but said a dollar-denominated Eurobond was more likely.