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Oct. 27 (Bloomberg) -- Moscow’s city government plans to buy back as much as 30 billion rubles ($994 million) in bonds this year to reduce its debt burden after a record borrowing spree, Deputy Mayor Andrei Sharonov said.
“Moscow is buying practically all of its previous issues from the market as part of its strategy to reduce state debt,” Sharonov said yesterday in an interview in Moscow. “The debt is being bought at separate auctions to determine their market price.”
Russia’s capital, which sold a record $2.2 billion in debt last year, more than any other Russian local or regional government ever has, won’t tap capital markets this year or next year, Sharonov said. The city will carry over revenue and sell assets to cover a budget deficit next year, he said.
The buybacks will not affect debt due in 2012 or bonds that would incur fines for early redemptions, Sharonov said. That includes the city’s only Eurobond, 407 million euros of notes due in October 2016.
Moscow began buying back debt earlier this year, including a bond due in December.
“As additional budget revenue appeared, it was used to further reduce the volume of debt,” Sharonov said. “That process isn’t finished.”
--Editors: Alex Nicholson, Peter Branton
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