Moscow Stock Exchange eyes first ‘replacement bonds’ in September

A sign with the logo is displayed outside the office of the Moscow Stock Exchange in the capital Moscow, Russia March 24, 2022. REUTERS/Maxim Shemetov

MOSCOW, Aug 29 (Reuters) – The Moscow Stock Exchange (MOEX.MM), Russia’s largest stock exchange, said it expected next month to issue the first so-called “replacement bond” issues. “which Russian companies need to replace unusable Eurobonds.

President Vladimir Putin signed a law in July that gives companies until the end of 2022 to issue bonds under a simplified procedure in the local market.

“We hope that the first replacement bond issues will appear at the end of September, because there is not much time left before the end of the year,” said Ekaterina Nagaeva, director of the exchange’s listing department, in comments. cleared for publication on Monday.

Proposed by the central bank, the “replacement bonds” would replace Eurobonds that Russian companies can no longer service due to sanctions over Moscow’s actions in Ukraine.

Nagaeva said the parameters of a replacement bond issue must be the same as the Eurobonds they replace in terms of maturity, yield, coupon schedule and face value.

Bonds can be issued in rubles or foreign currencies. A term in the law allows the lender to require repayment in rubles, rather than in the bond’s issuing currency.

“Other parameters – surety, covenants, prepayment – may differ depending on the circumstances,” Nagaeva added. “Their maintenance or adjustment is left to the discretion of the issuer and the investor.

“Investors should therefore be mindful of the parameters and structure of the replacement bond offered to them.”

The Moscow stock exchange is seeking to gradually restore some sense of normalcy to Russian financial markets after severe disruption in February and March as Western sanctions against Russian actions in Ukraine began to bite.

The exchange plans to extend trading hours for currencies and equities and to welcome back foreign investors from “friendly” jurisdictions – those that have not imposed sanctions – for derivatives trading. Read more

Nagaeva said the exchange recommends that issuers regularly disclose their financial statements. The central bank has told Russian banks they should not publish certain financial statements, seeking to limit the risks to credit agencies associated with the imposition of Western sanctions.

“The complete lack of disclosure by issuers reduces transparency in the market, increases investor risk and lowers confidence in the market,” Nagaeva said.

Reporting by Alexander Marrow, editing by Louise Heavens and Tomasz Janowski

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