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Russia: Fixed income markets reflect optimism and soft monetary policy

  • Last week the OFZ-curve shifted 3bps upwards across all durations
  • On the auction day the issues closed at 7.24% and 7.16%
  • On the secondary debt market, the Government of Moscow placed an interesting 8-year “green” issue at 7.38% per annum

Last week the OFZ-curve shifted 3 bp upwards across all durations. The MinFin offered two issues – OFZ-26233 (with a date-to-maturity in 2035) and OFZ-26235 (with a date-to-maturity in 2031). The volume of the offer for the first one was limited to RUB 9.2 bn or within the volume of that available for placement in the indicated issue with demand at RUB 32.7 bn. The volume of the offer for the second issue totaled RUB 30 bn with demand of RUB 89.5 bn. The positive market environment allowed the MinFin to place both issues in full within the offered volumes. The cut-off prices totaled 7.27% and 7.23%, almost without any premiums to the market. On the auction day the issues closed at 7.24% and 7.16%. Trading volumes within the MoEx sovereign bond index remained pretty moderate – at about RUB 51 bn. The markets are reluctantly trading in OFZs ahead of the publication of inflation data for May (7 June) and the CBR meeting on 19 June. As of 24 May the weekly inflation continued to accelerate and totaled 0.5% MTD vs +0.3% for the whole month in May 2020.

On the secondary debt market the Government of Moscow (BBB-/Baa3/BBB) placed an interesting 8-year “green” issue at 7.38% per annum. The proceeds from the issue will be directed for the financing of bus park updating and the construction of Big circle metro line. In the first half of June retailer ReStore (A(RU) АКРА and ruA Expert RA) will offer 3-year issue for RUB 3 bn and Aeroflot (BB- (Fitch)/ruAA-( Expert RA)) will offer 5-year issue for RUB 15 bn.


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The contents of this document have been prepared by Joint Stock Company “Alfa-Bank” ("Alfa Bank") as Investment Research within the meaning of Article 36 of Commission Delegated Regulation (EU) 2017/5...

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