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REFILE-UPDATE 1-Russian finance minister says sanctions talk stalls Eurobond plans

(Refiles to remove extraneous word “said” in quote, paragraph 3)

MOSCOW, Sept 16 (Reuters) - Russia is waiting for an opportunity to tap the Eurobond market, Finance Minister Anton Siluanov said on Wednesday, but will not do so with the threat of sanctions hanging over it.

Moscow is looking for additional sources of funding as it seeks to make up for a budget shortfall as a result of lower oil prices and the global coronavirus pandemic.

“We are not closing the window, we will look at it based on market conditions. We have everything ready. We will tap (the market) as soon as there is an opportunity, in order to maintain our presence on the market,” Siluanov told reporters.

“All these restrictions, sanctions and hype around (Alexei) Navalny do not give us confidence in a good placement,” he said.

Kremlin critic Navalny became a focal point for the Russian authorities in August after he became ill while travelling from Siberia to Moscow. The politician was airlifted to Berlin, where doctors found he had been poisoned with a Novichok nerve agent.

The threat of extra sanctions relating to Navalny’s illness and Moscow’s role in the political turmoil in neighbouring Belarus have made Russia increasingly dependent on borrowing.

Siluanov said on Wednesday that the country would increase state borrowing by $12 billion in 2021.

Russian officials have hinted at a Eurobond issue in 2020, but the coronavirus pandemic has thwarted their plans. Russia last raised $2.5 billion in June 2019 through dollar-denominated Eurobonds maturing in 2029 and 2035.

“If this continues, we will probably hold off this year,” Siluanov said of talk about possible sanctions against Russia.

“If everything settles down, then it could be possible to prepare an appropriate issuance,” he added.

Russia is also planning to raise taxes on some mining companies, tobacco sales and high-viscosity oil in a further attempt to plug budget holes.

Reporting by Darya Korsunskaya; Writing by Alexander Marrow; Editing by Catherine Evans and Alexander Smith

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