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. Last Updated: 07/27/2016

Bank Restructuring Agency Mulls Bond Sales to EBRD




Russia's agency for restructuring the banking system, ARKO, is considering selling its bonds to the European Bank for Reconstruction and Development, ARKO's head said Wednesday.


"They [the EBRD] have said themselves they are ready to extend us loans guaranteed by the Russian government," ARKO Director Alexander Turbanov told reporters, adding the sale would be at face value.


The government allocated 4 billion rubles ($148 million) of guarantees for ARKO bonds in the 2000 budget. The agency scheduled the issue for July 2000.


Turbanov also said ARKO could raise EBRD funds through other methods but did not elaborate.


ARKO had previously said it relied on EBRD help to finance the restructuring of Russia's banking system, shattered by the August 1998 financial crisis.


EBRD head Horst K?hler said during his visit to Moscow on Monday the agency would cooperate with ARKO to help banks which were active in lending to small and medium-sized firms.


Russia will hedge new securities to be issued later this month against inflation or ruble depreciation Bella Zlatkis, the head of the Finance Ministry's domestic debt department, said Wednesday.


"We shall adjust yields to the planned inflation or the planned change in the [ruble/dollar] rate," he said. "We want to guarantee the hard currency value of the asset and, accordingly, its yields."


First Deputy Finance Minister Alexei Kudrin said Tuesday the government, in the absence of a new International Monetary Fund loan, would issue up to 10 billion rubles ($372 million) of securities to help plug the hole in the budget.


The issue is aimed at attracting foreign funds frozen in special accounts earmarked for domestic debt investments. The new paper will allow proceeds to be converted into hard currency and repatriated.


Foreign investors in the restructured domestic debt have at present only one fully legal way of repatriating revenues - through central bank dollar auctions.