Russian Corporate Bonds Hammered as Fresh U.S. Sanctions Bite

(Bloomberg) -- Russian corporate bonds are getting hit amid a selloff in notes from firms tied to the billionaires who were added to the U.S. sanctions list late Friday. The MICEX Corporate Bond Index dropped the most since early January, slumping along with the country’s equities.

Russian Corporate Bonds Hammered as Fresh U.S. Sanctions Bite

Here’s a selection of some of the biggest bond moves:

  • Polyus PJSC, which has more than $5 billion of debt, saw its dollar-denominated notes due 2024 tumble more than 16 cents to about 83 cents on the dollar, with the yield climbing to 8.9 percent from 4.7 percent when they were issued in January. Suleiman Kerimov, whose son controls Polyus, was among those sanctioned.
  • VTB Bank’s 6.95 percent dollar bond due 2022 dropped 2.6 cents to 104 cents on the dollar, postings its biggest loss in more than two years. The bond now trades at its lowest price level since November 2016. The lender’s chairman, Andrey Kostin, was included in the list of sanctioned individuals on Friday.
  • Gazprombank’s 7.496 percent subordinated dollar bonds slid after the bank’s chairman, Andrey Akimov, was included in the U.S. sanctions list.
  • Ruble-denominated bonds of United Co. Rusal maturing 2026 tumbled the most on record after both the company and its owner, Oleg Deripaska, were mentioned in the sanctions list. Shares in the company fell 50 percent in Hong Kong as the company warned the sanctions may trigger technical defaults on its debt.

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