Russia placing blockbuster $7 billion Eurobond deal

Tue Mar 27, 2012 1:11pm EDT
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By Oksana Kobzeva and Lidia Kelly

MOSCOW (Reuters) - Russia will raise $7 billion in Eurobonds in the largest emerging markets sovereign offering since at least 2000, fully covering its foreign borrowing plan for 2012, sources close to the deal said on Tuesday.

Capitalizing on strong oil prices that have boosted confidence in Russia's fiscal performance, the dollar offering attracted bids of $17 billion, leading the Finance Ministry to slightly tighten yield guidance on the three-tranche deal.

Russia plans to issue $3 billion in 30-year paper at 250-255 basis points over U.S. Treasuries, establishing a new benchmark long bond in its first international offering since April 2010.

It will also place $2 billion in 10-year paper at 240-245 basis points over Treasuries and $2 billion in five-year bonds at 230-235 basis points over, the sources said.

That yield guidance represented a tightening of up to 5 basis points from earlier indications on the five- and 10-year bonds and of 10-15 basis points on the 30-year paper, which met strong interest from investors.

Pricing is expected on Wednesday.

"They are paying to get the size away," said a bond trader in London.

According to Thomson Reuters data, the deal is the largest by an emerging markets sovereign since 2000. In the emerging markets space it is the biggest since state-controlled Brazilian oil firm Petrobras raised $7.2 billion in February.   Continued...