Gazprom Issued Eurobonds for Nord Stream 2

  • The last time Gazprom issued Eurobonds was in the fall of 2020.
  • This week the European Parliament will demand to stop the construction of the Nord Stream 2 project.
  • "After the Russian attack on Navalny, we also have to talk about the energy issue."

Gazprom announced the issuance of Eurobonds for a period of more than five years. The Russian corporation has successfully placed a record $2 billion Eurobond with a yield of 2.95% for a period of eight years. The placement was done on the Irish Euronext Dublin Exchange.

Nord Stream is a system of offshore natural gas pipelines from Russia to Germany. It includes two lines running from Vyborg to Lubmin near Greifswald forming original Nord Stream, and two lines under construction running from Ust-Luga to Lubmin termed Nord Stream 2.

The last time Gazprom issued Eurobonds was in the fall of 2020. Gazprom placed perpetual Eurobonds in dollars and euros, in the amount of $ 1.4 billion and €1 billion, respectively. According to the press release

“It should be particularly noted that despite the volume of the issue of $2 billion, comparable to the issues of the world’s largest oil and gas companies, Gazprom conducted the placement without a premium for a new issue.”

Additionally, the demand from international investors exceeded 75% of the volume of the book, including applications from investors from the United States, Great Britain, Switzerland, and other European countries, as well as Asia and the Middle East.

The First Vice President of Gazprombank added:

“The issue is unique not only for the time of the company’s entry into the market, established by the new benchmark for Russian issuers at the coupon rate, but also for the participation in the placement of new investors, in particular, from Asia. In general, investor demand has been highly diversified both by type and geography of investors with active participation of Asian and European accounts.”

Manfred Weber is a German Member of the European Parliament (MEP) and leader of the center-right European People’s Party. A member of the Bavarian Christian Social Union, Weber was the EPP’s Spitzenkandidat for Commission President. However, Ursula von der Leyen was nominated instead.

Nevertheless, this week the European Parliament will demand to stop the construction of the Nord Stream 2 project, due to the arrest of the agent provocateur, Alexey Navalny, that occurred upon his return to Russia. At present, Mr. Navalny was arrested and is being detained for 30 days.

In an interview with Der Spiegel, Manfred Weber, leader of the conservative European People’s Party in the European Parliament said, “after the Russian attack on Navalny, we also have to talk about the energy issue.”

He added, “it is the most powerful instrument we have. And the Nord Stream 2 project is therefore one of the ways to generate further pressure. . . Mere appeals to Russia are not enough.”

However, it was Mr. Navalny’s plan all along to have Russia sanctioned. Hence, he wants Russia to experience additional turmoil.

The sanctions would be directed against Russian oligarchs, members of President Vladimir Putin’s inner circle, and the Russian media. The restrictions would also include the freezing of assets in EU countries and a ban on entry to these states.

“The European Union should no longer be a place of welcome for Russian wealth with an unclear origin,” Der Spiegel quotes the text of the resolution. The question is, will the EU also sanction Mr. Navalny’s wife and family, who has large assets in the UK?

It should be noted that if the proposed sanctions will be adopted, the sanctions will not be imposed automatically. All 27 EU members would have to agree.

Overall, the new Gazprom Eurobonds could be impacted if the EU imposes new sanctions against Russia.

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Christina Kitova

I spent most of my professional life in finance, insurance risk management litigation.

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