VTB Group, Russia’s second-largest lender, plans to sell yuan bonds in a push to become the country’s first company to offer debt in the Chinese currency.
VTB, which became the first Russian company to sell Singapore dollar bonds in July, will offer three-year Chinese debt in a deal arranged by its investment banking unit, VTB Capital, and HSBC Holding Plc, according to a person with knowledge of the transaction, who declined to be identified because the information isn’t public.
Russian President Dmitry Medvedev has called for wider use of emerging-market currencies in bilateral trade to offset the influence of the dollar and euro. Moscow’s Micex Stock Exchange will introduce ruble-yuan trading Dec. 15 after China allowed its currency to trade against the ruble in the interbank market from Nov. 22.
“Potential issuance is consistent with our debt diversification strategy,” Herbert Moos, VTB Group’s deputy chairman, said in an e-mailed response to questions today. “VTB could become the first Russian issuer to issue debt in China, setting up a new capital pool for Russia.”
VTB, which has dollar, euro, Swiss franc, ruble and hryvnia-denominated debt outstanding, postponed its debut offering of five-year notes in Brazilian reais last month due to market volatility, according to a person with knowledge of the transaction. The yuan sale would be the first from Russia, Bloomberg data show.
United Co. Rusal, the world’s biggest aluminum producer, is also planning to sell bonds in yuan as it expands its presence in China, head of capital markets Oleg Mukhamedshin said Sept. 2.
VTB is rated Baa1 by Moody’s Investors Service, its third- lowest investment-grade ranking, and one step lower at BBB by Standard & Poor’s, the same level as the Russian government’s rating.
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