Russian 'Panda' Bonds Face Chinese Hesitation Amid Sanction Fears
Despite interest from major Russian firms, no Chinese companies or institutions have publicly committed to purchasing Russian 'panda' bonds, according to reports. The hesitation stems from fears of secondary Western sanctions, leaving Russian companies facing deep financial isolation.
Russian officials have maintained that companies are free to issue panda bonds if buyers can be found. However, attempts to raise capital in China's bond market have collapsed due to these very fears. Some Russian firms are now exploring alternative funding methods, such as tying loan restructuring to commodities trade deals.
On the other side, China's state-owned brokerages and banks have been avoiding Russian deals due to sanction concerns. This reluctance is driven by geopolitical risks, with Chinese banks and investors unwilling to buy Russian panda bonds. Top Russian state corporations, including Rosatom and Gazprom, have been among those exploring this option, but with little success so far.
Meanwhile, Russia is urgently importing gasoline from China and other Asian nations to offset domestic shortages. Despite these efforts, Russian companies continue to face significant financial challenges, more than three years after the invasion of Ukraine.
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