Russian Giants Eye Yuan Bonds Amid Western Market Lockout

Major Russian companies, including Rosatom and Gazprom, are considering the sale of yuan-denominated 'panda' bonds amidst Western capital market closures due to geopolitical tensions. Russia seeks to connect directly with Chinese investors to bolster yuan liquidity in its market, collaborating with China under increased sanctions scrutiny.

Major Russian corporations like Rosatom and Gazprom are exploring the prospects of issuing yuan-denominated 'panda' bonds as Western markets remain inaccessible due to geopolitical strains. This development emerges as Russian companies pursue alternative financial avenues amid ongoing sanctions.

According to sources, Russia's Finance Ministry is advocating for the issuance of yuan-denominated sovereign bonds within Russia, aiming to forge a direct depositary bridge with mainland Chinese investors and enhance yuan liquidity domestically. This strategic financial maneuver coincides with Chinese and Russian leaders fostering their 'no limits' partnership.

The Financial Times reports that China is poised to reopen its domestic bond market to significant Russian energy players. Meanwhile, Chinese rating agency CSCI Pengyuan has awarded Gazprom an 'AAA' rating, setting the stage for potential debt issuances. However, these initiatives will require Chinese regulatory approval and necessitate navigating the landscape of secondary sanctions.

(With inputs from agencies.)