September 20, 2017 / 10:49 AM / 10 months ago

Russian bank B&N's dollar bond falls after it seeks bailout

LONDON, Sept 20 (Reuters) - Russian lender B&N Bank’s $150 million bond maturing in 2019 fell by 31 cents on Wednesday to around 72 cents, according to Thomson Reuters data, after it asked the central bank for a bailout.

B&N Bank, owned by Russian tycoon Mikhail Gutseriev and his family, is Russia’s 12th biggest bank by assets and has expanded rapidly in recent years. It issued the bond in March 2016 and its next coupon is due on Sept 27.

Its appeal for central bank help comes shortly after Otkritie bank, Russia’s largest private lender, said late last month that it had a hole in its balance sheet and needed help.

The central bank said B&N’s owners had asked for financial rehabilitation via the central bank’s Fund for Banking Sector Consolidation. That is the same mechanism that is being used to rescue Otkritie.

“The announcement from the central bank was a bit weird, they don’t seem to have made a commitment yet. So it is unclear whether it will be like Otkritie, that they pay senior debt or they will just default on everyone,” said one fund manager in London.

News that B&N was seeking a bailout also hurt Russia’s financial sector stock index on Wednesday.

Reporting by Sujata Rao and Alexander Winning

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