On August 21, Russia closed the largest deal in its history by repaying $22.5 billion in debt to the Paris Club early. Russia’s state debt now stands at 9.0% of the national GDP and is being touted as the lowest of the kind worldwide. Given the early repayment of $15b of the debt last year, Russia expects to save $12b on interest payments overall by 2020. Russia’s sovereign rating has strengthened amid the news. The Rossia-30 Eurobonds have appreciated by 0.382 percentage points to 111.062% of their nominal value, their highest over the past five months, while returns on the bonds have shrunk to 5.846% annually. Experts are hopeful that the debt repayment will speed up the upgrade of Russia’s credit rating and the establishment of the futures generations fund.
Source: VEDOMOSTI, August 22, 2006
