Russia's Alfa-Bank repays Eurobond

Alfa-Bank, Russia's largest privately-owned bank, confirmed on Monday that it had fully repaid on schedule a three-year $175m eurobond maturing on July 28. The bank also reported that it plans to enter western capital markets “in the near term” with a syndicated loan later this year followed by a Eurobond issue in the first half of 2001. Alfa-Bank is the first Russian corporate issuer to repay its eurobonds in full and on time and the payment reflects the country's improved financial situation, which has earned Russia recent upgrades from international rating agencies. Fitch last week upgraded Alfa-Bank's Long-term rating to CCC+ from CCC-, and Standard & Poor's last Thursday raised its ratings on Russia's Eurobonds from CCC+ to B-, equivalent to the Moody's B3 level. In a move welcomed by ratings analysts, the upper house of parliament last week voted to implement long-awaited tax reforms which should allow the authorities to increase tax collection, crucial for growth and balancing the budget. The spread on Russia's dollar bond maturing in 2007 has narrowed to 860 basis points over 5-year US Treasuries, from around 1,200 in mid-May. Russia's long-awaited debt restructuring with the London Club of commercial creditors will be completed by August 25.