BOFIT Viikkokatsaus / BOFIT Weekly 2016/37

​Financial institutions and non-financial corporations have issued 1.1 trillion rubles ($17 billion) in new domestic bonds this year, which is slightly less than year ago. The share of public offerings in debt issuances continued to decline, however, with just over half of bonds issues public in January-August. State development bank VEB, for example, issued $600 million in domestic bonds in July, which was sold mainly to domestic banks. An increasing share of Russian debt issues lack international credit ratings, which could be due to the growth in use of asset-secured bonds. Russia’s new law on pledged securities entered in force in July 2014, making it easier to issue also other asset-backed than mortgage-backed securities.

At the same time, the appetite and opportunities of large corporations to issue Eurobonds seem to have grown. In January-August, Russian banks and corporations issued $7.1 billion in eurobonds, up from $1.8 billion in the same period last year. E.g. steelmakers Evraz and NLMK issued in June Eurobonds of $500 million and $700 million, respectively.

The Moscow stock exchange’s ruble-based share index is up 14 % this year and hit new highs in line with a mild recovery in oil prices. Share trading overall, however, remains as sluggish as last year. The index of corporate bond market is up 9 % and trading in debt securities has risen sharply this year. Growth in the domestic bond market has been supported by the improved liquidity situation of banks and government borrowing. The finance ministry has this year issued new sovereign debt according to schedule totalling 519 billion rubles.