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. Last Updated: 07/27/2016

Rosneft Plans Issue of $1.8Bln in Ruble-Denominated Bonds

State-controlled oil giant Rosneft plans to issue ruble-denominated bonds worth 45 billion rubles ($1.76 billion) in 2007 and 2008, a banking source said Friday.

"They will be issued in three tranches," he said.

The source said the oil firm mandated Troika Dialog, VTB and Gazprombank to organize the issue.

The first will be issued by the end of this year, the other two sometime next year, the source added.

The ruble bonds will have a duration of up to seven years.

But Rosneft made it clear that the decision was not yet final.

"Directors at Rosneft need to make the decision to issue the bond, and they haven't yet met on this," a Rosneft spokesman said.

In July, Rosneft postponed a planned dollar bond of up to $5 billion because of market volatility.

The bond was part of a $15 billion medium-term note program to help recover debts stacked up from acquiring most of bankrupt oil giant Yukos.

At the start of 2007, Rosneft had debts of $13 billion and has since raised a further $22 billion loan from a consortium of international banks.

When delaying the bond, Rosneft said it would utilize other funding options.

"Rosneft is probably thinking the situation on the international market will not improve in the medium term," said Mikhail Nikitin, an analyst at Raiffeisen Bank.

"They were not happy with the eurobond terms and local borrowing is less expensive."

Other analysts feel state-controlled Rosneft could be under pressure from the government to keep its finances closer to home.