What’s new: Russia’s largest oil producer Rosneft completed a placement of yuan-denominated bonds worth 15 billion yuan ($2.15 billion), the company said, making it the third Russian giant to borrow via yuan bonds.
The deal marks the largest bond sale ever by a Russian company. The coupon rate on the 10-year bonds was set at 3.05% per annum, according to the bond documents. The proceeds will be used to finance the company’s investment programs.
Rosneft originally planned a 10 billion yuan bond sale but increased the size due to strong demand.
The context: Rosneft has joined Russia’s largest gold producer PJSC Polyus and aluminum producer United Co. Rusal International PJSC in selling Chinese-currency bonds as Russian companies increasingly look to China and the yuan for borrow in the face of sweeping sanctions imposed by Western countries following the Russian invasion of Ukraine. in February.
Polyus issued 4.6 billion yuan of yuan-dominated bonds in early September, following the sale of 4 billion yuan bonds by Rusal in August.
Russian companies are exploiting the yuan bond market to reduce their dependence on the US dollar amid sanctions imposed by the United States and others, including restrictions on the use of the dollar in international transactions. This has made it difficult for Russian companies, banks and investors to do business, forcing them to turn to alternative currencies.
Quick Takes are condensed versions of China-related stories for quick news that you can use.
Contact reporter Han Wei ([email protected]) and editor Bob Simonon ([email protected])
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