(Corrects last paragraph to say investment is for all of
By Anna Yukhananov
WASHINGTON Nov 7 The International Finance Corp
said it gained approval from the Russian government to issue its
first rouble-denominated bonds, in an amount up to $730 million,
to bolster the country's domestic capital markets.
The IFC, the World Bank's private-sector lending arm, said
in the near term it plans to sell up to 13 billion roubles ($412
million) in five-year bullet bonds, though the exact timing and
amount would depend on market conditions.
Kevin Kime, an IFC principal financial officer in
Washington, said the IFC had been looking to sell bonds in the
eastern and central European region for a while, and the current
climate was favorable.
"We felt the opportunity relative to our general business
strategy in Russia and also with respect to the economic
conditions related to a bond placement there ... proved to be
attractive in recent months," he said.
The IFC regularly auctions off bonds - which are rated
triple-A by Moody's and Standard & Poor's - to raise funds that
it then invests in b u sinesses that contribute to development.
A local issuance can help strengthen a country's capital
markets by creating more liquidity and signaling a healthy
investment climate. Robust domestic capital markets also allow
businesses to borrow in their local currencies, protecting them
from foreign-exchange risk.
The IFC, often willing to go into countries that other
investors shun, said it is often the first international issuer
in local markets. It has sold bonds in eight local currencies
since its program began in 2002.
"With a major triple-A rating, we're a marquee issuer
globally," Kime said. "We think our presence in the local
markets provides somewhat of a signal to others. ... It can help
create a credit benchmark."
Russian sovereign bonds are rated BBB - two notches above
non-investment grade or junk-bond status - by both Standard &
Poor's and Fitch.
The IFC has made a recent push to enter domestic capital
markets, in May announcing a planned investment of $2.6 billion
in Africa, wi th a six-country domestic bond pr ogram at the core
of its activities. I t aims to help countries develop their
private sectors and create markets more resilient to capital
($1 = 31.5125 Russian roubles)
(Reporting by Anna Yukhananov; Editing by Jan Paschal)