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Kostin: State should establish more coherent control of state corporation borrowings

The state should establish a more coherent control of state corporation borrowings because at the end of the day it is the state that ends up taking responsibility, told the head of VTB Andrei Kostin on the sidelines of the «RUSSIA CALLING!» investment forum.

Answering a question about the situation with Rosnano, the banker noted that he is not expecting debt defaults: «there is no panic, there will be no meltdown». He explained that VTB acts as a financial consultant and the company’s partner.

«Overall, I think that the state should establish a more coherent control, especially on state corporation borrowings. Because at the end of the day it is the state that ends up taking responsibility for them. We can remember the story with VEB that had problems, if I’m not mistaken, and Roskosmos before that, and so on», said Kostin.

The Moscow Exchange suspended trading in all nine issues of Rosnano bonds — three classical bonds worth 31.4 billion rubles and six exchange-traded bonds worth 40.2 billion rubles — on November 19 on the order of the Bank of Russia. Shortly after the suspension, the company announced that it had discussed its financial performance and possible debt restructuring scenarios with its creditors and major bondholders.

Trading in Rusnano securities on the Moscow Exchange resumed on November 22 with a drop in the price of bonds and a corresponding increase in their yields. The most noticeable increase was in the yields of bonds maturing on December 1, due to the imminent redemption of the securities.

On Tuesday, the Minister of Finance of Russia Anton Siluanov expressed his confidence that the negotiations will result in a compromise and all parties will be satisfied. He also noted that government-backed obligations will be fulfilled. In her turn, Elvira Nabiullina, the head of the Russian Central Bank, stated that the Bank of Russia does not see any threat to the financial stability from Rosnano debts and presupposes that all obligations guaranteed by the state will be fulfilled.