2023-09-06 10:13:21
The Ministry of Finance expects to replace Eurobonds by the end of 2023, Denis Mamonov, Director of the Department of Public Debt and Public Financial Assets of the Russian Ministry of Finance, told reporters on the sidelines of the forum RBC. According to him, the department made the necessary amendments to the budget code in the summer. The Ministry of Finance expects that the government will support the idea and the first replacement bonds will be issued in the fourth quarter.
Mamonov hopes that the department will not delay the replacement process until December. “As soon as the structure of the transaction is formed, we will evaluate investor demand and understand how it would be right to implement it, we will immediately move on to action,” the official concluded.
In July, the ministry announced prepared amendments to the draft law on replacing circulating Eurobonds with new issues with similar conditions. The amendments allow for the possibility of replacing the state debt on terms that provide for the transfer of all rights, if the transfer of the replaced securities to the issuer is impossible due to the actions of foreign states or financial organizations. The decision on the need to replace a particular issue will be made by the government.
A year ago, Vladimir Putin approved a temporary procedure for payments on Eurobonds. According to the mechanism, the obligations are considered fulfilled if the payment is made in rubles in the equivalent of the cost of the debt in foreign currency at the rate of the Russian foreign exchange market. But in May, the president signed a new decree requiring Russian Eurobond issuers to issue replacement bonds by early 2024.
Additionally, you can issue papers an unlimited number of times. The parameters of the new securities should be similar to Eurobonds in terms of maturity, income, coupon payment schedule and face value. If Eurobond holders have not purchased securities during the term of their placement, then the fulfillment of obligations is carried out by Russian legal entities by transferring funds in the manner determined by the Board of Directors of the Central Bank of the Russian Federation.
Since the beginning of 2023, according to the Moscow Exchange, replacement bonds have accounted for a third of corporate bonds in the glass, while individuals have become the main source of liquidity in the debt market, said Natalia Loginova, director of the Moscow Exchange’s Issuer Relations Department at the RBC forum. The share of individuals in the debt market now stands at 66%, she added.
As of August 1, the volume of the external volume of the state debt of Russia in foreign currency amounted to 56.2 trillion rubles, of which 18.4 trillion rubles are accounted for by state guarantees.
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