Struggling to cover a widening budget gap, Russia is selling its first Eurobond since being hit with international sanctions two years ago, with state bank VTB Capital as the sole organizer of the deal after the U.S. and European Union warned foreign banks against participating.
Beyond raising cash, the deal could have important symbolic value for the Kremlin, which has sought to minimize the impact of sanctions since they were imposed in 2014 over the conflict in Ukraine.
“For Moscow this is not about the money, it is about the messaging of undermining and eroding sanctions,” said Tim Ash, head of emerging-market strategy at Nomura International Plc in London. EU officials are expected to extend the restrictions next month or in early July.
