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UPDATE 2-Russia to swap 2018, 2030 Eurobonds for 2027 and 2047 papers -FinMin
September 13, 2017 / 11:38 AM / 7 days ago

UPDATE 2-Russia to swap 2018, 2030 Eurobonds for 2027 and 2047 papers -FinMin

(Adds details, background)

MOSCOW, Sept 13 (Reuters) - Russia will swap its Eurobonds maturing in 2018 and 2030 for additional issues due in 2027 and 2047, in a move to postpone payments of the external debt, the finance ministry said on Wednesday.

In 2016, the ministry announced the plan to swap some of the Eurobonds for ones with longer maturity, as it was looking to ease the budget burden. A nominal value of Eurobonds to be issued will be up to $4 billion, the ministry said on Wednesday.

Russia needs to pay almost $3.5 billion to the holders of Russia-2018, due July 24 next year, and a further $10.7 billion to Russia-2030 holders, according to Thomson Reuters data.

Initially, the ministry was planning to swap three issues - due in 2018, 2028 and 2030 . The ministry did not explain on Wednesday why the 2028 issue was not offered for the swap.

Konstantin Vyshkovsky, head of the state debt department at the finance ministry, told Reuters on Monday the swap plan risked being scrapped if investors do not accept the ministry’s conditions or if bondholders asked an unrealistic price.

At least one of the Eurobonds planned for the swap had a distorted and artificially inflated market price as a large chunk of it is held by one investor, Vyshkovsky said.

Otkritie Bank, one of Russia’s largest private lenders, holds Russia-30 bonds. Otkritie was recently rescued by the central bank.

Announcing the swap on Wednesday, the ministry said it would swap the 2018 paper at up to 107.8 percent of its nominal value and the 2030 Eurobond at up to 117.5 percent.

Bids will be accepted on Sept. 13-19, it added, and prices will be set on Sept. 20 with the settlements on Sept. 25.

State lenders Sberbank and VTB will organise the swap along with a subsidiary of Gazprombank, the ministry said. (Reporting by Darya Korsunskaya and Elena Orekhova,; Writing by Dmitry Solovyov and Jack Stubbs; Editing by Katya Golubkova and Matthew Mpoke Bigg)

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