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Soviet bank to float bonds Western capital markets

The London-based Moscow Narodny Bank launched a $50 million bond issue Wednesday in what is thought to be the first ever foray into the Eurobond market by a Soviet borrower, and the first such issue for foreign investors since the Russian Revolution in 1917.

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Lenders will be asked to subscribe to the bond over seven years at a floating rate of interest that will carry a margin of 3/16 percent over the six-month London Interbank Offered Rates (LIBOR).

The issue, however, was likely to attract criticism from holders of Czarist bonds issued by Russian governments before the 1917 revolution, bond managers said. The new Soviet government repudiated this debt in 1918 and the bonds remain in default.

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