Mining capital resources — an overview of Russian eurobonds

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Over the course of the past 10 years, the eurobond markets have become an increasingly important source of funding for Russia’s leading companies. In April 2013 alone, Russian corporate issuers, with metals and mining companies to the forefront, took advantage of historically low interest rates to raise in excess of $11bn (£7bn).

While market conditions have changed since May 2013 against a background of capital outflows from emerging markets in response to indications of a reduction of quantitative easing by the US Federal Reserve, the Russian eurobond market is firmly established and likely to continue to be of interest to corporate borrowers. This article summarises some of the key considerations for a Russian company in planning a eurobond issue.

Since it is not currently practicable for tax and regulatory reasons for a Russian company itself to issue eurobonds, two structures have evolved for eurobond offerings by Russian companies, both of which involve the issuance of the eurobonds by an offshore issuer rather than the Russian company, which forms the underlying credit…

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