2014.06.2402:11:41UTC+00Sberbank ushering in Russian reentry in debt markets

After several months of minimal activity arising from Moscow’s annexation of the Crimean Peninsula, Russian companies led by its biggest lender are getting into bonds once more.

Among the first to be issued are five-year bonds worth €1 billion euros from Sberbank, marking the first time the bank has issued bonds denominated in the eurozone currency. Upon its release, the state owned bank received over €2 billion worth of investor orders. More importantly, the sale represents Russian markets opening themselves up once again to international investors with improvements developing in their dispute with their Ukrainian neighbors.

This development comes as other signs in Russia’s financial markets indicate a return to their previous normal levels. In stocks, the benchmark Micex index is up by over 20% after hitting bottom in March to achieve a value similar to what it was before it took a hit from European and US sanctions. Their currency in the rouble has recovered against the US dollar as well to its strongest this year.

Prior to Sberbank, no other international bonds were issued by Russian companies as the US handed down penalties to shareholders of Russian companies causing foreign investors to avoid assets such as its equities. In turn, the exit of investors led to the International Monetary Fund lowering its predictions on the country’s growth.

Sberbank posted losses in the first quarter of 18% when compared to their earnings from 2013. Russia’s third largest bank in Gazprombank is looking to follow in their footsteps this week by issuing another euro denominated bond.