U.S. warns banks off Russian bonds

Russian_poster_WWI_060

http://www.nasdaq.com/article/us-warns-banks-off-russian-bonds-20160224-01433

The U.S. government has warned some top U.S. banks not to bid on a potentially lucrative but politically risky Russian bond deal, saying it would undermine international sanctions on Moscow, people familiar with the matter said.

The move, apparently the first of its kind since the sanctions went into effect, has sent Wall Street bankers scrambling to determine whether the opportunity for new business is worth the political downside of bucking the administration’s warning. The rules don’t explicitly prohibit banks from pursuing the business, but U.S. State Department officials hold the view that helping finance Russia would run counter to American foreign policy.

Russia plans to issue at least $3 billion of foreign bonds—its first international issue since the U.S. and its allies imposed sanctions in 2014 following Moscow’s annexation of Crimea and support for separatists in Ukraine, according to people familiar with the matter.

So far, there is no consensus among the Wall Street firms about whether to move ahead. Some bank officials, including at Citigroup, say they won’t participate. Other banks, including Goldman and J.P. Morgan, continue to weigh their options.

Officials at the State Department and Treasury Department issued the caution in response to questions from some of the banks about whether they were permitted to arrange a bond sale for Russia.

U.S. government officials say helping Russia finance its debt would run counter to the objectives of the sanctions.

“It is essential that private companies—in the U.S., EU and around the world—understand that Russia will remain a high-risk market so long as its actions to destabilize Ukraine continue,” the State Department said in a statement to The Wall Street Journal. The State Department also warned of “reputational” risks of returning “to business as usual with Russia.”

American banks had made inroads into the Russian market, setting up offices there and pitching for deals. Since 2002, U.S. banks have collectively captured roughly a quarter of annual Russian investment-banking revenue on average. In 2007, U.S. banks did nearly $630 million of more than $2 billion in investment-banking business in Russia, but that amount dropped to $26 million last year after the sanctions took effect.

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dont touch that tainted bond..come and have some our juicy 10 year babies..

“It is essential that private companies—in the U.S., EU and around the world—understand that Russia will remain a high-risk market so long as its actions to destabilize Ukraine continue,”

russian bonds are bad whilst they are engaged in ukraine..but if they pulled out of ukraine they would be good again?

“Russia plans to issue at least $3 billion of foreign bonds—its first international issue since the U.S. and its allies imposed sanctions in 2014 following Moscow’s annexation of Crimea and support for separatists in Ukraine, according to people familiar with the matter.”

401

~ by seeker401 on February 29, 2016.

One Response to “U.S. warns banks off Russian bonds”

  1. Buy detroit bonds

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