Bloomberg and Jefferies Financial Group Inc. are among the firms that are facilitating a sudden uptick in trading in the Russian government's local-currency bonds.
Russia Is Scouring the Globe for Weapons to Use against Ukraine
The financial institutions have been offering bids in the region of 20 -- 25 kopecks on the ruble, according to people familiar with the matter, who have refused to be identified because the information is private. According to data from the Moscow exchange, the bonds trade at about 90% of face value.
Jefferies said in an emailed response to questions that they were working within global sanctions guidelines to facilitate our clients' needs to navigate this complicated situation. Our motto is always Clients First, Always. Barclays didn't want to say anything when contacted by Bloomberg.
Since Russia's invasion of Ukraine in the past has resulted in a bifurcated market for the notes, which were once a popular part of emerging-market investors' portfolios. Myriad restrictions prevent foreigners from receiving coupons and principal on the so-called OFZ bonds, but inside the country local investors can receive payments, and the notes are still in demand.
Foreigners' share of the OFZ market was steady after dropping in the wake of the invasion, and was at 17.6%, or 2.8 trillion rubles $46 billion as of July 1, according to Russian central bank data.
It is not clear what caused the recent uptick in trading, but the timing coincides with a general license issued by the US Treasury s Office for Foreign Assets Control in late July authorizing transactions through Oct. 20 aimed at winding up Russian debt or equity trades that were made to June 6.
That means that US investors can purchase Russian sovereign bonds if they need to unwind a short position.
In our experience, intermediaries that were previously hesitant to engage in close out related transactions now accept that it is clear, said Paul Marquardt, a partner at the law firm Davis Polk Wardwell.
According to Bloomberg, the investment bank and brokerage firm Seaport Global LLC was buying local currency Russian government bonds. The Russian 10 year ruble notes fell 30 basis points in the local market between July 18 and the end of the month, and have traded around that level since, according to the Moscow exchange data.
None of the Work From Home Revolutions is a Trap for Women