Russia Loses Buyside Support for Eurobond After Banks Balk

Europe’s biggest bondholders are being told by internal risk managers to avoid a new debt issue after regulators in the U.S. and European Union warned foreign banks off helping Russia sell its first Eurobond since 2013. Just like prospective underwriters for the new securities, money managers at Germany’s Allianz Global Investors Europe GmbH, Union Investment Privatfonds GmbH and Deka Investment GmbH are wary of coming to the attention of U.S. and EU regulators for the wrong reasons.

“The Finance Ministry is in a really tough spot,” said Dmitri Barinov, a money manager who runs $2.6 billion of assets at Union in Frankfurt. He said his compliance department has banned him from buying bonds sold by brokers listed under sanctions. “I don’t think they expected to see such a push back.”