Gazprombank Bonds Plunge Toward Distressed Levels Amid Sanctions - Bloomberg

Gazprombank Bonds Plunge Toward Distressed Levels Amid Sanctions - Bloomberg:



"Dollar bonds of OAO Gazprombank approached distressed levels after the biggest weekly slide on record in the latest sign that U.S. and European Union sanctions are hobbling Russia’s biggest lenders.



Yields on subordinated debt of Russia’s third-biggest bank jumped 180 basis points this week to 11.69 percent at 6:33 p.m. in Moscow, bringing the premium of the December 2023 notes over U.S. Treasuries to 946 basis points. Spreads exceeding 1,000 basis points are typically considered distressed.



Borrowing costs of Russian lenders have soared, signaling investor concern over their ability to make debt payments as penalties choke off their access to western markets. This has forced the government to pledge funds to shore up the capital of lenders including Gazprombank. Russia is facing the biggest outflows in six years as the ruble tumbles and oil slides into a bear market, bringing the economy of the world’s largest energy exporter to the brink of recession."



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