Market Analysis

Russia can count on good demand for placement of Eurobonds in 2010. Investment rating of the country create good conditions for the possible deployment

Experts predict a good demand for Russia"s debt in 2010. "I think it will be a high demand for Russia"s Eurobonds - said The Wall Street Journal, John Chambers, chairman of the Standard Poor" s on the sovereign ratings. - This is a stable investment-grade loan.

volume production, which is expected early next year, could reach 17.8 billion dollars. Before the planned attraction of new borrowings Russia completed the exchange of debt of the former USSR. The total amount received by the exchange of debt claims amounted to 405.8 million dollars.

Russia"s return to the capital market had at the time when the volume of new listings sovereign debt of developing countries, is expected to reach critical mass. Brasil, Venezuela, Mexico and Argentina also are projected to be in 2010 to issue new debt.

demand should not be a problem for these borrowers, many of whom entered the market in 2009 to successfully meet its financial needs on a background of growing interest from investors. Investors, in turn, this year tried to take advantage of higher yields on riskier loans, while in developed countries, interest rates were close to zero. The difference in interest rates is likely to persist for many months.

"If Russia puts a price with some discount for the secondary market, accommodation could go well," - says analyst for emerging markets New York-based Invesco Claudia Kalisz. While recent issuers such as Brazil, do not have to make substantial discounts - because of high demand.

Russia"s Finance Ministry said that in the future to 2012 will rely more on foreign debt market to finee7ance annual deficits, while Russia"s oil fund resources are shrinking. On Monday, rating agency Standard Poor "s said that in Russia the net borrowing requirements in 2010 may reach 6% of GDP.

Last week, the rating agency confirmed the rating of Russia and the BBB changed the outlook from negative to stable, noting that the budget figures will gradually improve. Kudrin believes that this creates favorable conditions for the proposed placement of Eurobonds.

Chambers added that access to international markets would give Russia greater flexibility in financing. He was confident that demand will be high enough at all levels.

All three international rating agencies - Standard Poor"s, Moody"s, Fitch - accepted Russia investment-grade ratings, partly due to the presence in the country"s 440 billion dollars of international reserves, commented edition. In terms of reserves of Russia took third place in the world after China and Japan.

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