VTB converts the ruble

The Eurobonds issued in rubles will be sold in Dublin yesterday VTB began to advertise a deal among investors, which will become a prologue for the complete conversion of the Russian currency. Ruble bonds are sold in the amount of 15 billion rubles. There is nothing new in this. The news begins with the fact that the organizers of the release are foreign banks - Barclays Capital and Citigroup Global Markets. Because foreigners will also buy these bonds. For Russian rubles. Barclays Bank PLC and CJSC KB Sitibank were agents for foreign exchange operations.

Cottage of securities will already be behind the sea - on the Dublin Exchange. In other words, it will be Eurobonds. And this circumstance makes the deal absolutely pioneer.

This does not mean that, staying in the city of Dublin, you can just buy bonds of the Russian bank by rubles. There they will be sold all for dollars. Even VTB is not allowed to violate the law on foreign exchange regulation. But even today it will not be simple dollars, but dollars tied to the ruble. And this means that the growth of the ruble relative to the dollar will bring the owners a special prize.

It is this circumstance that makes ruble Eurobonds an attractive asset.

As an assessment of Nikolai Kashcheev, the VTB treasury analyst, most likely, will be bought by those who are familiar with the Russian market, but are capable of taking such risks on themselves. This is hedge funds.

But the situation is changing rapidly. The law on foreign exchange regulation will lose its strength in 2007 (most likely even earlier). The term of the current loan is three years. He is paid off on another currency regime.

It is quite obvious that VTB simply tries the soil underfoot. And if it goes, transactions of this kind will become a routine business.

“This tool is very interesting,” says Boris Ginzburg, head of the Uralsburg FC analysis department. According to him, now foreign investors, on the one hand, are interested in investments in ruble assets, because the ruble is a growing currency, on the other hand, investors are not too eager to buy them in the Russian market, since they are faced with various restrictions. “Therefore, the ideal tool for them is papers that are placed according to the rules of Eurobonds and on foreign venues, but at the same time nominated in rubles,” he says. However, according to Boris Ginzburg, in addition to theoretical interest, investors will, of course, study the practical side of release. If it turns out that they will have to make a lot of additional efforts to buy these papers, the idea can fail.

The VTB initiatives in the Russian debt market give out an obvious desire for the Russian government to make the locomotive of the Russian ruble out of this bank. To this end, he was attached to the aid of the Council of People's Commissars. When last summer in the oldest of them, the Moscow People’s Bank, they changed the head of the treasury, they did not hide the press release that they were doing this for cooperation with VTB and the possibility of liberalizing operations with the ruble until 2007. Yesterday the situation was repeated. The bank is allowed what others only think about.

03/30/2006 / Evgeny Mazin, Alexei Tikhonov Material published in the newspaper No. 55 dated 03/31/2006.