ralphmalph Report post Posted February 22, 2011 http://www.telegraph.co.uk/finance/newsbysector/transport/8341398/Russian-Railways-will-sell-sterling-debt-to-upgrade-network.html Even though I posted a slightly TIC title this is interesting that the Russkies, no friends of us Brits after the spy shennanigans are issuing debt in sterling and not dollars or euros. Is it because so many billionaire russians live in London or do they think the Euro and the Dollar are both toast and Georgie boy is engineering fortress sterling. Quote Share this post Link to post Share on other sites
interestrateripoff Report post Posted February 22, 2011 You beat me to this. Have you considered that the Russians are betting Sterling will be toast and are betting they'll be able buy more pounds with their rubles? If sterling halves in value against the ruble over the coming years it would be a very good investment. Quote Share this post Link to post Share on other sites
ralphmalph Report post Posted February 22, 2011 You beat me to this. Have you considered that the Russians are betting Sterling will be toast and are betting they'll be able buy more pounds with their rubles? If sterling halves in value against the ruble over the coming years it would be a very good investment. It could be that Lazards with Mandleson as lead advisor are in the deal, he has a lot of dodgy Russian mates. Quote Share this post Link to post Share on other sites
the_duke_of_hazzard Report post Posted February 22, 2011 You go first. Quote Share this post Link to post Share on other sites
andydtaylor Report post Posted February 23, 2011 It makes complete sense. On the forward FX curve the £ is in backwardation, so if they lock in a long forward contract when the debt is issued, it effectively lowers the interest rate they'd be paying. It's a sound enough decision. Quote Share this post Link to post Share on other sites
jonb Report post Posted February 23, 2011 http://www.telegraph...de-network.html Even though I posted a slightly TIC title this is interesting that the Russkies, no friends of us Brits after the spy shennanigans are issuing debt in sterling and not dollars or euros. Is it because so many billionaire russians live in London or do they think the Euro and the Dollar are both toast and Georgie boy is engineering fortress sterling. If they are borrowing pounds, it would be because they think the pound is toast, and it will be very cheap to pay it off, or alternatively to tap into the Russian billionaire market, or because they can get a cheaper interest rate. Quote Share this post Link to post Share on other sites
tim123 Report post Posted February 23, 2011 You beat me to this. Have you considered that the Russians are betting Sterling will be toast and are betting they'll be able buy more pounds with their rubles? I don't think so. They are offering the bonds in London because that's where the expertise is and that market demands a "hard" currency. As they will be using the money to build a high speed rail network, they will have concluded that they can "suffer" the risks of the currency because the fares that they will charge for usuing the railway, once it is in operation, will be "western" fares, as is the norm for all such railways. tim Quote Share this post Link to post Share on other sites
Prescience Report post Posted February 23, 2011 One is minded to recall the last round of Russian Bonds were used as wallpaper............. Quote Share this post Link to post Share on other sites
