In July corporate borrowers has sharply reduced activity on the domestic debt market. For the month, the company attracted at least 170 billion rubles, two thirds of which were in the first-tier issuers. The decrease is due to the uncertainty of the economic Outlook and expectations of further fall in interest rates.After a burst of activity that occurred on the Russian debt market in June, last month there was a noticeable cooling. According to the Agency Cbonds, in July, the issuers placed bonds less than 170 billion rubles, which is more than two times less borrowings June and 1.7 times less than last year. Decreased activity in the primary market compared with the previous month and the Ministry of Finance — 226 bn in July vs 390 billion rubles in June. However, compared to last year, the Ministry attracted 2.5 times more money.According to estimates chief analyst debt markets Bq Region Alexander Ermak, the share of companies of the first echelon increased in July by 10% to 63%, while the share of the second tier decreased to 25% to almost 39% in June. While there was a decrease in urgency of borrowing from the more cautious attitude of investors to risk. “In July, the share of loans with a maturity of less than three years accounted for 47% of the total accommodation. A month earlier, their share was 33%. The share of bonds with a maturity of three to five years more than five years fell to 28% and 13%, respectively, versus 39% and 18% in the previous month”,— says Alexander Ermak.According to the statistics of previous years, in the summer months almost always there was a decrease in the volume of corporate placements. According to the head of management of investment banking products and solutions of the Bank “FC Opening” Yevgeny Ananyev, traditionally July and August are periods of low activity on the primary market due to the decline in business activity. However, there are exceptions, in particular, in July 2019, the issuers ‘ activity in comparison with the previous month increased by half thanks to the two depressions of rates by the Bank of Russia, and also similar to the actions of global regulators (see “Kommersant” on 2 August 2019).Aggravated the situation increased risk of a second wave of the pandemic coronavirus, worsening U.S. relations with China and Russia, which negatively affected the level of interest rates in the secondary market. The yield of ten-year OFZ during almost the entire month were in a narrow range 5,75–to 5.85% per annum at the end of the month again approached the level of 6% per annum. “In the third week of July was observed the weakening of the ruble on the currency market, what could be the reason for the decline in investor demand for new ruble risk and a General cooling of activity in the market”— analysts of “VTB Capital”.In such circumstances, issuers did not hurry to market. “Investment AK��evnosti companies is currently at a minimum. The need for financing is acute, and borrowers took a break in expectation of a further decline in rates,” noted Yevgeny Ananyev.In August, market participants expect further fall in activity in the primary market amid the peak holiday season. According to Alexander Yermak, at the beginning of the month about plans to collect new books of applications not announced even a single large corporate borrower. Analysts “VTB the Capital” expect with Sep traditional growth of activity on the part of issuers, which in the domestic market is largely “will depend on global economic trends, as well as further development of the situation around the pandemic.”Vitaly Gaydayev
