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Companies’ Foreign Debt Grows
06 July 2009
Reuters
The corporate sector’s foreign debt grew to $436.8 billion as of July 1 from $420.7 billion as of April 1, the Central Bank estimated Friday, suggesting that there has been renewed borrowing by Russian firms.
Russian companies borrowed excessively from foreign lenders at the height of the oil boom but had to face painful restructuring talks when commodity prices fell, the stock market plunged and revenues shrank. Their debt burden is now seen as one of the main risks to the Russian economy, with the specter of major bankruptcies looming.
As a result of redemptions, corporate foreign debt fell by $30 billion in the first quarter, but the new data showed that it started growing again.
The Central Bank estimated commercial banks’ foreign debt at $142.4 billion and the nonfinancial sector’s foreign debt at $294.4 billion.
The data showed that loans to the nonfinancial sector rose by $7.2 billion, suggesting that some firms were able to borrow abroad.
“Restructuring talks did not allow the debt to come down, while possible nonpublic deals and eurobond issuance have increased it,” said Yevgeny Nadorshin, chief economist at Trust Bank.
Also on Friday, the Central Bank estimated that Russia posted a current account surplus of $17.2 billion in January to June, compared with $64.3 billion in the same period of last year.
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