• 9 minutes WTI @ 67.50, charts show $62.50 next
  • 11 minutes The EU Loses The Principles On Which It Was Built
  • 19 minutes Batteries Could Be a Small Dotcom-Style Bubble
  • 5 hours Permian already crested the productivity bell curve - downward now to Tier 2 geological locations
  • 1 hour Desperate Call or... Erdogan Says Turkey Will Boycott U.S. Electronics
  • 4 hours Saudi Fund Wants to Take Tesla Private?
  • 6 hours Starvation, horror in Venezuela
  • 4 hours Corporations Are Buying More Renewables Than Ever
  • 10 hours Are Trump's steel tariffs working? Seems they are!
  • 10 hours Is NAFTA dead? Or near breakthrough?
  • 11 hours China still to keep Iran oil flowing amid U.S. sanctions
  • 8 hours How To Explain 'Truth Isn't Truth' Comment of Rudy Giuliani?
  • 6 hours The Discount Airline Model Is Coming for Europe’s Railways
  • 45 mins CO2 Emissions Hit 67-Year Low In USA, As Rest-Of-World Rises
  • 1 hour Film on Venezuela's staggering collapse
  • 1 min Saudi PIF In Talks To Invest In Tesla Rival Lucid
ZeroHedge

ZeroHedge

The leading economics blog online covering financial issues, geopolitics and trading.

More Info

Trending Discussions

Russia Plans First-Ever Sale Of Yuan Bonds

Russia China

As Russia braces for further sanctions from Washington D.C. over their alleged role in "meddling" in the 2016 U.S. election, they are reportedly prepping a $1 billion yuan-denominated bond issuance in an effort to preemptively diversify financing risks away from the West.  According to Bloomberg, the sale will total 6 billion yuan and could come as early as next week.

Russia hired Bank of China Ltd., Gazprombank and Industrial & Commercial Bank of China Ltd. to arrange investor meetings for the sale of 6 billion yuan ($907 million) in five-year notes, according to people familiar with the plans. The issuance is slated for the end of this year or beginning of 2018, they said, speaking on condition of anonymity because the deal isn’t yet public.

The sale has been under discussion since U.S. and European sanctions in 2014 over the takeover of Crimea blocked many state-owned Russian companies’ access to Western capital markets. A report due next quarter from the U.S. Treasury on the potential consequences of extending penalties to include Russian sovereign debt has increased pressure on the Finance Ministry to seek out alternative means of borrowing.

“It would be wise of Russia to tap the yuan market now,” said Vladimir Miklashevsky, a senior economist at Danske Bank A/S in Helsinki. “China remains Russia’s biggest trade partner, China’s enormous financial system has lots of buying potential, too.”

While Bank of Russia Governor Elvira Nabiullina has said there will be “no serious consequences” from U.S. sanctions on new domestic government debt, economists in a Bloomberg survey estimated the move could add 50 basis points to 150 basis points to borrowing costs.

(Click to enlarge)

The Yuan-denominated bonds, known as dim-sum bonds, would be listed on the Moscow Exchange and available for investors to purchase via the Moscow branch of ICBC.

Related: The Oil Information Cartel Is (Finally) Broken

Of course, in addition to advancing Russian diversification interests, a successful sale of yuan-denominated Russian debt would also advance China's interests in the internationalization of the yuan. 

If Russia goes through with the sale, it would be the first sovereign issuance of yuan-denominated bonds outside of China since 2016, according to Dealogic, with prior issuances in Hungary, Mongolia, the U.K. and the Canadian province of British Columbia.

By Zerohedge

More Top Reads from Oilprice.com:




Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News