The expert named the benefits of the appearance of yuan-denominated OFZs for investors and the state

The appearance of the first yuan-denominated government bonds will be a key step for the development of the Russian debt market, as it is the sovereign issue that can form a full-fledged yield benchmark for corporate placements. Ruslan Spinka, Director of Sales and Customer Service at Fontvielle IC, told Izvestia on November 14.

"Corporate borrowers have already formed the primary yield curve for yuan instruments, but it was the sovereign benchmark that was needed for the segment to fully develop. The appearance of such an issue will allow market participants to more accurately assess the cost of capital in Chinese currency, and will also pave the way for a wider range of corporate placements in yuan," the expert said.

According to Spink, the profitability of future issues will be competitive: the Ministry of Finance is likely to place a premium of 0.5–1 percentage points to the rates of substitute euro- and dollar-denominated bonds. The benchmark for long—term federal loan bonds (OFZ) may be 6-7% per annum in yuan, for short-term bonds - about 5-6%. Such a range, the analyst stressed, is both attractive to investors and economically justified for the government against the background of high demand for instruments in "hard" foreign currency.

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Yuan-denominated OFZs may be of interest to a wide range of participants: banks, institutional players, corporations with revenue or liabilities in Chinese currency, as well as private investors seeking to diversify currency risk. Given the limited access to classic Eurobonds, the demand for reliable foreign assets remains high. The main advantages of such securities will be protection against ruble volatility and the possibility of currency diversification.

The choice of the yuan for the first foreign issue is logical, noted Spinka.

"Firstly, the yuan has actually become the main settlement currency in the foreign trade of the Russian Federation: it accounts for a significant part of cross-border payments. Secondly, a course is developing towards de—dollarization and strengthening operations in national currencies, primarily with China, Russia's largest trading partner. In this context, the issue of yuan—denominated OFZS looks like not only a financial, but also an infrastructural step," the expert concluded.

On November 12, the Russian Ministry of Finance announced that in December of this year it would hold the first ever placement of OFZs denominated in Chinese yuan. The placement will take place in two stages: the collection of applications is scheduled for December 2, and the technical placement is scheduled for December 8, 2025. The bonds will be issued with a maturity of three to seven years, a coupon period of 182 days and a nominal value of 10,000 yuan each.

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