Russia to issue yuan-denominated sovereign bonds

Gazprombank VP Denis Shulakov

Russia is looking to raise $1bn in yuan-denominated sovereign bonds, the Financial Times reported this week. on Dec. 7. The bonds would set a benchmark interest rate in yuan (or renminbi) for the Russian government, and subsequently for corporate issuers, Denis Shulakov, head of capital markets at Gazprombank, which is providing informal assistance in preparing the issue, told the paper.
The International Monetary Fund (IMF) recently made the yuan a world reserve currency by including it in its Special Drawing Rights basket. Shulakov told the Financial Times that Russia was looking to “bring in a new source of liquidity that comes with the internationalisation of the renminbi.”
Although Russian companies issuing yuan-denominated bonds in Moscow would probably pay a higher rate of interest than would be the case with dollar-denominated debt, Shulakov said that Russia would still seek new funding options even if the sanctions were lifted. “Memories for investors fade quickly but for borrowers they do not,” he said. “Yesterday you could get picked up by sanctions for one reason, tomorrow for another. You need to be able to access capital where you can control the game.”

Source: rbth