LONDON, April 29 (IFR) - Flights from Moscow to Asia are
suddenly filling up with corporate executives.
With Russian issuers shut out of the US dollar and euro bond
markets because of events in eastern Ukraine, some are turning
their attention further east.
Sberbank, Russia's biggest lender, was visiting investors in
Singapore and Hong Kong last week with sole lead OCBC Bank.
Bankers says Gazprom is another leading Russian corporate that
has met Asian investors, while there are also rumours about
Russian Agricultural Bank and diamond producer Alrosa.
One banker familiar with the situation says that the
Russians are travelling beyond the main financial centres of
Hong Kong and Singapore and have also been visiting India,
Indonesia and Malaysia.
These meetings with investors are considered as "non-deal"
roadshows; an opportunity for funding officials to keep accounts
abreast of their latest news. But they also let these executives
explore the possibility of a deal. Speculation is mounting that
one or two of these issuers may try to sell a bond in the
offshore renminbi or Singapore dollar market if interest can be
The idea, however, that a Russian borrower would do such a
deal provokes two thoughts. First, would any bank risk arranging
a transaction given the fraught political situation between
Russia and the West.
While the raft of sanctions against Russian individuals and
companies has been limited to President Putin's inner circle,
they may widen if the crisis in Ukraine escalates further.
Would any bank, be it US, European or Asian, really want to
risk damaging its reputation simply for the sake of a
USD300m-equivalent Dim Sum bond?
The second issue concerns the Russian companies themselves.
Are they that desperate for finance they need to issue in such
niche markets? Presumably not. So what's the point? To show they
have market access? Issuing in a small, regional, relatively
illiquid bond market in Asia is hardly going to prove that.
Far better for these Russian issuers to visit their core
investors in the US and Europe than spending time and money on a
potential transaction that sends the wrong message. Unless it's
the prospect of a few free days in Raffles or the Mandarin
Oriental that's tempting them over.
(Reporting by Sudip Roy; Editing by Philip Wright)