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Russia’s gas giant Gazprom has hired banks to set up investor meetings in the U.S. to test the market for a possible U.S.-dollar denominated Eurobond issue, which would be the first since the U.S. and the EU slapped sanctions on Russia three years ago, over the annexation of Crimea.
According to Thomson Reuters’ market analysis service IFR, Gazprom would hold a roadshow in Los Angeles and New York next week, which could be followed by the issue of a U.S.-dollar denominated Eurobond of a benchmark size.
According to IFR, Gazprom has hired Gazprombank, JP Morgan, Mizuho and SMBC Nikko to arrange the meetings in the U.S.
The western sanctions against Russia over the conflict in Ukraine were expanded in September 2014 to include U.S. Treasury sanctions that prohibit the exportation of goods, services (not including financial services), or technology in support of exploration or production for Russian deepwater, Arctic offshore, or shale projects that have the potential to produce oil, to five Russian energy companies – Gazprom, Gazprom Neft, Lukoil, Surgutneftegas, and Rosneft – involved in these types of projects. In 2016 the Treasury further extended the sanctions to a number of Gazprom subsidiaries.
Should the upcoming U.S. roadshow lead to a U.S.-dollar bond issue, it would be Gazprom’s first since the sanctions were enacted.
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According to Gazprom data about its Eurobond issues currently in circulation, Gazprom’s last bond sale in U.S. dollars dates back to 2013, when in February that year the group sold a dual tranche bond, one of US$800 million due in 2020, and another of US$900 million maturing in 2028.
The Russian gas giant has a combined US$10.4 billion worth of dollar-denominated Eurobonds outstanding, according to Thomson Reuters data.
Gazprom’s last Eurobond issue was a five-year 500-million Swiss francs (US$493.2 million) sale in November 2016.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.