Russia issues first 30-years-debt

On Wednesday, Russia issued the first 30-years-bond in rouble according to an annoucement of the Russian Ministry of Finance. According to the Neue Zürcher Zeitung this is the longest debt issued in the local currency rouble since the collapse of the former Soviet Union. The issue comprises a total 8 bln rouble and will be due for redemption on 6 February 2036. Market observers believe that the Russian government may be financing pensions funds with this loan. The yearly interest of the bonds will be 6.9 % with the exception of the first interest payment in this August of 6.95 %.

In December 2005 Standard & Poor's had upgraded Russian bonds in rouble for the ninth time since 1999. This upgrade caused the Russian bond yields to drop. For example the 9% rouble issue due for redemption in August 2006 yielded 6.7% on Tuesday compared to the 7.14% yield three months ago according to Trust Investment Bank. S&P rates the rouble long bonds with "BBB+" which is S&P's third lowest investement rate. Moody's counry rating of Russia is "Baa2".


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