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. Last Updated: 07/27/2016

Moscow Kicks Off Eurobond Road Show

Top government officials hit the road to global financial centers Monday to sell investors on Russia's long-awaited Eurobond issue, which will mark the country's return to international capital markets.


Russian Finance Minister Alexander Livshits said over the weekend that the placement will be sometime between Nov. 21 and Nov. 25 and total "up to $500 million."


A series of presentations, known in the trade as a road show, begins Monday in Tokyo and winds up Nov. 20 in New York. Organized by J.P. Morgan and SBC Warburg, they are designed to boost the attractiveness of the bonds by emphasizing the strong points of Russia's post-Soviet economic recovery.


Local investors said teams of Russian officials have been organized to address concerns about everything from Moscow's relations with the International Monetary Fund to a rumored slowdown in its London Club debt negotiations.


Among officials said to be taking part are First Deputy Premier Vladimir Potanin, presidential Chief of Staff Anatoly Chubais, First Deputy Finance Minister Andrei Vavilov and Deputy Finance Minister Mikhail Kazyanov.


"Everybody is pitching in," said Richard Deitz, head of fixed income at Renaissance Capital in Moscow. "It will be interesting to hear some of their answers."


Livshits gave reassurances over the weekend that tax collections for the first 10 days of November improved over October.


Analysts have long predicted that Russia will place $350 million to $500 million worth of Eurobonds, though most observers agree it would be better to secure a healthy yield on a smaller placement.


"The Eurobond's main purpose is to set a track record for the $1 billion to $2 billion issuance expected in 1997," said Robert Devane, head of fixed income at Troika-Dialog.


In the countdown to Russia's Eurobond placement, Potanin met with various government agencies Saturday and gave them just 10 days to solve the mounting problem of so-called "frozen" domestic Finance Ministry bonds.


The frozen MinFins emerged as an untimely threat to a successful Eurobond launch and have rattled international investors eager to snap up Russia's newest issue. Russian police released figures last week showing that authorities have seized about $74 million of dollar-denominated MinFins, bonds this year as part of criminal investigations.