Allianz Entangled With Big Ruble Debt Holders in Coupon Freeze
(Bloomberg) -- Some of the world's largest asset managers are set to grapple with a new ban on coupon payments to foreign owners of Russia's ruble bonds.
Allianz SE, BlackRock Inc. and Vanguard Group are among the biggest overseas holders of the debt, known as OFZs, according to data compiled by Bloomberg, based on holdings most recently disclosed by investors. Allianz has the equivalent of about $2.2 billion of the securities, while BlackRock has just over $1 billion, the data show. Vanguard is the No. 3 holder with about $790 million, followed by Capital Group and Legg Mason, the data show.
A spokesman for Allianz Group USA referred requests to comment to the parent company, with representatives there not immediately responding to calls outside of European office hours. BlackRock declined to immediately comment on their holdings, while Vanguard said in a statement that it “is reviewing the various global sanctions and determining the impacts to our funds.” Capital Group and Franklin Templeton -- which acquired Legg Mason in 2020 -- did not immediately respond to requests for comment.
Russia's central bank instituted the prohibition on coupon payments to foreigners via an instruction to the depositaries and registries that would typically process these transfers. The measure was described by the central bank as a temporary step to shore up markets in the wake of international sanctions. It could leave foreign investors unable to collect income on their holdings.
Russia Bans Transfer of Ruble Bond Coupon Payments to Foreigners
Bloomberg's search includes holdings of passive funds, such as ETFs, which have little choice in what they buy or sell. It's also worth noting that Bloomberg's data doesn't necessarily include holdings by investors that aren't required to disclose their debt transactions; holders tracked by Bloomberg own an estimated 9% of OFZs for which data is available, or $16.7 billion of $179 billion outstanding.
The yields on OFZ bonds jumped almost two and half percentage points last week as President Vladimir Putin first recognized two breakaway regions in eastern Ukraine and then launched a military attack on the rest of the country.
©2022 Bloomberg L.P.
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