Gazprom to Sell First Euro Debt Since Last Year

Russian energy giant OAO Gazprom is set to sell a three-year euro-denominated bond on Thursday, according to a person familiar with the deal.

Pricing guidance on the deal suggests that Gazprom will pay an interest rate of 4.75% to 4.875% on the bond, according to the person.

Mining firm Norilsk Nickel broke a nine-month dollar bond freeze when it issued a $1 billion bond on Tuesday at an interest rate of 6.625%.

These bond issues come as some investors take encouragement from a perceived easing of tensions in Ukraine, concluding this lessens the likelihood of further international sanctions being imposed on Russian companies.

For Russian companies, this has helped lower financing costs this year, prompting them to start sounding out international bond investors once again.

Russian companies have seen a drop in their financing costs this year. The average yield on Russian corporate and quasi-sovereign corporate debt denominated in U.S. dollars is now 6.3%, according to Barclays.

The average yield rose to more than 13% last December following a sharp fall in the price of oil, an escalation of the conflict in Ukraine and the imposition of U.S. and European sanctions against various Russian firms and individuals. Yields rise as prices fall.

Gazprom last issued a bond in euros in February 2014, according to Dealogic, when it paid an interest rate of 3.6% on a €750 million deal maturing in February 2021.

Gazprom did not immediately respond to a request for comment.

Write to Christopher Whittall at [e-mail]

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(END) Dow Jones Newswires

October 08, 2015 07:05 ET (11:05 GMT)

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