Barclays Capital, Citibank, Credit Suisse and VTB Capital have been selected to jointly organize Russia’s eurobond issue, the ministry said in a statement. Deputy Finance Minister Dmitry Pankin was quoted by the state-run news agency RIA Novosti as saying that other banks could be tapped to arrange the next issue.
Russia announced last year that it would have to borrow in capital markets to cover its budget deficit -- which may reach 6.8 percent of the GDP this year. Moscow last placed bonds in 1998 and did not return to the debt market after a sovereign debt default the same year.
The Finance Ministry on Friday said there has been no final decision yet on when and how much money to place, but Finance Minister Alexei Kudrin said last week that the first tranche of the issue could be sold in the first half of the year.
Russia’s 2010 budget mentions a possibility of borrowing up to $17.8 billion, but Pankin has recently said Russia would borrow far less than that as its economy is recovering faster than expected.
Russia paid off most of its massive Soviet-era debt to the Paris Club and the London Club by 2006. Last week, it paid a symbolic $1 million to the London Club to settle that debt.
Two rating agencies, Fitch and S&P, raised the outlook for Russia’s sovereign debt within the past two months. Kudrin lauded those steps, saying that this would make Russian borrowing significantly cheaper.
