Banks, funds buyers of Russian Eurobond

MOSCOW: Banks, funds and asset management firms were key buyers of Russia's Eurobond issue this week, the finance ministry said.

Russia managed to raise $1.75 billion at a yield of 4.75 percent this week in its first Eurobond issue since 2013. The ministry said universal banks accounted for 30 percent of the issue, with funds and asset management firms taking 34 percent.

Banks focused on private banking took 25 percent, with insurance companies and other investors buying the rest.

It said around 75 percent of the issue was bought by foreign investors from the United Kingdom, France, Switzerland, Asia and the United States, with a quarter taken by Russian banks, asset management firms and brokerage companies.

On Wednesday, Finance Minister Anton Siluanov had said foreign investors bought $1.2 billion of the $1.75 billion.

Technically, western sanctions do not prevent foreigners from buying into the bond because the Russian finance ministry is not a target of the punitive measures imposed by the United States and European Union over Moscow's role in the Ukraine crisis.

Washington had discouraged investors from buying the bond, but the finance ministry has said it will not use the proceeds to help companies hit by the sanctions. The ministry added that it will continue "active communication" with Euroclear and Clearstream to allow the new issue to be traded via the two settlement organisations.