Four Russian banks plan to issue dim sum bonds in Hong Kong

At least four Russian banks will issue up to 2.5 billion yuan (HK$3.1 billion) in dim sum bonds in Hong Kong by early next year, as Western sanctions against Russia accelerate a switch by the country's lenders from US dollars to the mainland and Russian currencies.

International financing has tightened for Russian banks, after the US government announced on September 12 restrictions on six Russian state-owned banks including the largest, Sberbank.

Three Russian banks plan to issue 2 billion yuan of dim sum bonds in Hong Kong early next year, said Elena Trofimova, chief executive of International Bridge for Cooperation, Development & Investments (ICDI), declining to name them. A fourth, RosinterBank, has announced similar plans.

ICDI, a Russian partly state-owned firm that connects Russian companies with international firms, is advising the banks on their Hong Kong bond issue.

RosinterBank, the first mid-sized Russian lender to issue dim sum bonds, hopes to make a private placement worth 500 million yuan by early November, said its deputy chairman Konstantin Vorobiev.

Although the 500 million yuan bond was not a large amount, it was part of RosinterBank's strategy to explore Asia's financial markets, Vorobiev added. "Other Russian banks are keeping an eye on this deal. If this deal is successful … it will become a trend."

RosinterBank also hopes to list in Hong Kong in three years and raise possibly US$100 million, Vorobiev added.