Russia’s Bond Market Return Aborted as Yields Surpass 9% - Bloomberg

Russia’s Bond Market Return Aborted as Yields Surpass 9% - Bloomberg:



"Russia tested appetite for ruble bonds for the second time in eight weeks yesterday, only to scrap the auction after seeing how much it would pay to borrow as the crisis over neighboring Ukraine escalates. 




The Finance Ministry said in a statement that investor bids for the 20 billion rubles ($560 million) in five-year and nine-year OFZ notes on offer didn’t “adequately represent” Russia’s “credit quality.” The government, which has canceled outright all but two weekly auctions since President Vladimir Putin’s incursion into Crimea on March 1, has sold just 14 percent of the OFZ notes in 2014 than it did in the year-earlier period, according to data compiled by Bloomberg.



The aborted attempt to return to the market confirms there’s “no demand” for government securities as the U.S. and the European Union consider further sanctions for what they see as Putin’s destabilizing role in Ukraine, according to Raiffeisen Capital. Russia may forgo foreign-currency debt sales this year and cut domestic borrowing as the weaker ruble boosts tax revenue from oil and gas exports and helps balance the budget, Finance Minister Anton Siluanov said last month."



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