The Tyumen Oil Company, Russia's third largest oil producer, has said it will postpone selling Eurobonds worth as much as half a billion dollars because borrowing costs are too high.
Tyumen had said it wanted to sell bonds to refinance some of its $2.3 billion in debt at lower rates after growing demand for Russian bonds pushed down yields required. The company in May pulled its first Eurobond sale after PricewaterhouseCoopers LLP withdrew approval of a Tyumen financial report a week after the auction.
“This creates problems for Tyumen to finance investment needs and it's likely it will secure smaller, syndicated loans to replace the planned Eurobond sale,” said Valery Nesterov, an analyst at Troika Dialog brokerage in Moscow.
Emerging market bonds have fallen in recent months on concern of a possible default by Brazil, the top emerging market borrower. Brazilian bonds dropped by a third since March as polls show rising support for politicians who have talked of renegotiating the nation's debt if they win October's presidential elections.