VTB highlights Russian bond opportunities

VTB Capital research today points to an increase in demand for Russian eurobonds on the back of upbeat market statistics. Strategists note investor appetite yesterday for US dollar-denominated bonds, with long issues gaining 75-100bp. Gazprom was among those in focus, with the company issuing new notes yielding 6.1%, slightly at a premium to the secondary market. This brought total volume to $400-500 million, says VTB.

There was also upbeat demand for Lukoil and VTB Bank itself, say analysts, with quotes improving by 50bp.

The benchmark Russia 2030 bond (yield to maturity 4.29%) was up about 25bp to 119.25-119.50bp, and its spread to swaps dropped slightly below 200bp. In light of this, VTB highlights that there are a number of cheaper issues on the sovereign curve: in particular, Russia 2015 (3.55%) and 2020 (4.58%) notes trading with a spread of around 210bp.