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. Last Updated: 07/27/2016

Capitals Head for Capital Markets

St. Petersburg hopes to launch a Eurobond later this month or in February, and Moscow is talking to rating agencies ahead of its own issue, officials said Tuesday.

In London, bankers said Moscow could issue up to $500 million in Eurobonds, possibly of a three- or five-year maturity, with the launch expected in late February or early March.

Neither city has tapped international capital markets since the 1917 Bolshevik Revolution, but they hope to attract foreign investors after the success of Russia's debut sovereign Eurobond last November.

St. Petersburg governor Vladimir Yakovlev told Itar-Tass the city would initially issue $100 million of bonds running between two and five years.

This would be followed by another $300 million issue, and if they were successful the city would issue further Eurobonds in 1998, it quoted him as saying.

St. Petersburg already issues ruble municipal bonds, but officials believe international borrowing would be cheaper.

St. Petersburg mandated U.S. investment bank Salomon Brothers last year to lead the Eurobond issue. But it is still waiting for a credit rating from one of the big international rating agencies, needed to attract a large number of Western investors.

Moscow Mayor Yury Luzhkov met officials from Moody's rating agency Monday in the first of a series of talks with the agency, a city spokesman said Tuesday.

"At these meetings the mayor of Moscow, as head of the government issuing the Eurobonds, is representing Moscow as a borrower," said Mikhail Chernyshev, head of the public relations service of the city's municipal debt committee.

Chernyshev said Luzhkov planned to meet officials from Standard and Poor's, another rating agency, in mid-February.

City officials have said Moscow plans to issue a Eurobond for up to $500 million in the first half of this year.

Credit Suisse First Boston and Nomura have been appointed to lead manage the issue. "Moscow's borrowing plans are on target at the moment, with launch due in late February or maybe early March," said one official at a bank involved in the transaction.

"They will be doing their due diligence next week, and after that make definite plans," the London-based source said.

Russia made a heavily oversubscribed $1 billion five-year issue last November in the biggest debut sovereign Eurobond.

But it is still unclear to what extent the federal government will authorize, guarantee or tax issues by other Russian borrowers. henshchina, no yeyo glaz smotrel na menya s takoi zloi, ostroi toskoi, chto ya obnyal yeyo" (I didn't like that woman, but she looked at me with such sharp, malicious toska that I took her in my arms).

Now what the heck does that mean?