WRAPUP 2-Russia debt/IPO deals to peak after $2 bln in 1 wk
* Magnit raises $527 mln in SPO, LUKOIL $1.5 bln
* Polymetal, Megafon seen next
* Trust in Russian firms revived, still tough for RUSAL
(Updates with LUKOIL pricing)
By Dmitry Zhdannikov
MOSCOW, Oct 29 (Reuters) - Russian firms have raised over $2 billion from debt and capital markets this week and more borrowers are poised to follow suit shortly if current risk aversion proves to be short lived.
After a period of panic selling at the end of 2008 and early 2009, investors have regained their appetite for Russia as oil prices rose to annual peaks, the rouble strengthened and government officials and bankers said the worst was over.
Russia borrowed less than any other BRIC nation this year and is the only one in the group -- which includes Brazil, India and China -- with lower syndication levels than in 2008.
This was because "the Russian economy had been falling while (those of) other BRIC nations continue to rise," said Denis Poryvai from Uralsib.
"The picture is different now as oil prices are strong, the economy is showing some signs of recovery and problems with credit refinancing are being solved domestically. We therefore expect a recovery in trust toward Russian companies," he added.
On Thursday, grocery chain Magnit (MGNTq.L) raised $527 million in a heavily oversubscribed secondary share issue while oil major LUKOIL is placing a $1.5 billion Eurobond (LKOH.MM). [ID:nN29373364]
Magnit's issue became the largest Russian share placement since the crisis and only the second to take place after steel maker Evraz (HK1q.L) [ID:nLL620295]. The Krasnodar-based retailer will use the proceeds to expand its hypermarket chain.
Magnit priced its SPO at the top end of the price range to meet healthy demand from foreign investors, who chose to ignore a 3-day correction in emerging markets.
LUKOIL's placement, however, has taken longer than expected to be priced but was in the end helped by better-than-expected U.S. economic data. It is Russia's first benchmark bond by a privately-held firm since the crisis.
"LUKOIL's bond placement could prove an important milestone in overcoming the effects of the crisis for Russian companies," analysts from Unicredit said in a research note.
