Why Russia should look to 'eurobonds' post-sanctions

In the face of limited capital market liquidity as a result of international sanctions and a slowdown in the Russian economy, CEO of emerging markets investment bank Renaissance Capital says a sovereign eurobond benchmark in Russia would be a "tremendous opportunity", as demand for high yield investments is currently so high.

Longer-term financing for Russian businesses has all but dried up, chief executive of the bank Igor Vayn told CNBC, but a Russian eurobond benchmark could provide some much needed liquidity for the Russian market.

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Eurobonds, or bonds that are denominated in a currency different to that of the country or market in which it is issued -- offer higher yields to investors and are proving very popular at the moment given current zero-bound interest rates around the world.

"I would suggest that the government to go ahead with that and go ahead and establish a benchmark. I believe that the existing sovereign eurobonds trade is an opportunity as their is appetite from investors," Vayn told CNBC.

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"Clearly in the euro zone – we see that the interest is so low if not negative in 75 percent of the euro zone countries and that is why we have seen some additional demand coming into the sovereign Russian eurobond as well as the corporate, despite the fact we have seen a number of downgrades by the ratings agencies, but the demand is still there because we have seen a lack of other opportunities in the world," he said.

Vayn said Russia should capitalize on the "tremendous window of opportunity" given that the U.S. will likely raise interest rates later this year and so will narrow the difference between corporate bonds and high yield investments.