Bloomberg News

Russia Axes Second OFZ Sale Ahead of Time This Month (Correct)

June 24, 2013

(Corrects date of auction in second paragraph.)

Russia axed its second government bond auction ahead of time this month as oil fell amid speculation China’s economic growth may slow.

The Finance Ministry canceled a June 26 sale, the last this quarter, because of current market conditions, it said in a statement on its website today. The yield on the government’s OFZ due February 2027 rose 30 basis points today to 8.35 percent, the highest since August, as of 5:23 p.m. in Moscow.

Brent crude dipped below $100 a barrel after slumping 4.7 percent last week, the biggest loss since April, and traded down 0.8 percent at $100.12. China’s central bank said the nation should fine-tune its policies as a cash squeeze in the banking system risks exacerbating an economic slowdown.

Russia, which gets about 50 percent of its budget revenue from the oil and gas industry, canceled a June 5 auction and shelved a sale of 10 billion rubles of 15-year notes last week, citing a lack of competitive bids. The government scrapped a May 22 sale for the same reason and sold only 900 million rubles of 20 billion rubles in securities offered on May 29.

The government has sold less than 60 percent of its targeted 300 billion rubles of OFZ bonds this quarter, while the Finance Ministry said June 21 it plans to issue 270 billion rubles of securities in the third quarter.

To contact the reporter on this story: Mark Sweetman in Moscow at msweetman@bloomberg.net

To contact the editor responsible for this story: Mark Sweetman at msweetman@bloomberg.net


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