EU-RUSSIA: Kremlin-EU 'Reparations Loan' For Ukraine "Delusional"
Reuters reports comments from the Kremlin claiming that the EU's concept of a 'reparations loan' to Ukraine using frozen Russian assets is "delusional". Kremlin says that European Commission President Ursula von der Leyen should remember that "reparations are paid by the losers".
- With Belgian PM Bart De Wever appearing cool (at best) towards the 'reparation loan' (see 'EU-RUSSIA: Belgian PM Demands Risk-Sharing On Using Frozen Russian Assets', 08:49BST), Kremlin says EU gov'ts "especially Belgium, need to comply with their international obligations."
- Russia claims it has a "rich arsenal of economic and political means to retaliate." On 30 September, Russian President Vladimir Putin signed a decree that intends to allow the acceleration of the sale of assets taken into state ownership.
- Bloomberg reports: "The decree is intended to speed up the sale of various companies, both Russian and foreign, [...]. Should the European Union begin seizing Russian assets, Moscow may respond with symmetrical measures, the person said. Hundreds of western companies working in sectors from banking to consumer goods still operate in Russia, including UniCredit SpA, Raiffeisen Bank International AG, PepsiCo Inc, and Mondelez International Inc."
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SPAIN: Spain Plans To Write-off E83bln of Regional Debt - Bloomberg
Latest from Bloomberg
- "Spain is moving ahead with a plan to write-off €83.2 billion ($96.8 billion) of regional governments’ debt as part of broader political negotiations to bolster support for Prime Minister Pedro Sanchez."
- "The measure, which would apply to loans owed to the central government, “is historic” and will allow Spain’s 17 regions to “regain financial and political independence”, Budget Minister Maria Jesus Montero said at a press conference on Tuesday. The measure is part of the investiture agreement signed with Catalan separatist party ERC to elect Sanchez as premier in 2023 and will need parliamentary approval."
- "The government has said that, if approved by parliament, the move won’t affect the central administration’s debt levels. Madrid had originally announced the plan in February"
On the last bullet point, current central government debt would be unaffected because the E83bln transfer from the central to regional government's has already been carried out (and thus, is already "accounted for" in Spain's fiscal/issuance plans). The aforementioned plan to write-off the debt would essentially transform this E83bln transfer into a subsidy (rather than a loan). As such, the move could in theory affect future debt levels, relative to the counterfactual of the regional government debt having been paid back.
GILT SYNDICATION: 4.75% Oct-35 gilt: Priced
- Reoffer: 98.972 to yield 4.8786%
- Spread set earlier at 4.50% Mar-35 Gilt +8.25bp (guidance was +8.25/+8.75bps)
- Size: GBP14bln (MNI expected GBP8-12bln with risks skewed to the higher end given the large book size)
- Books closed in excess of GBP141bln (inc JLM interest of GBP12bln - second largest ever for a gilt)
- Hedge ratio: 100% vs 4.50% Mar-35 gilt (GB00BT7J0027). Spot ref 97.76 / 4.7961%.
- Maturity: 22 October 2035
- Settlement: 3 September 2025 (T+1)
- Coupon: 4.750% SA, ACT/ACT, long 1st to 22 April 2026
- Benchmark: 4.50% Mar-35 Gilt (ISIN: GB00BT7J0027)
- ISIN: GB00BTXS1K06
- Bookrunners: HSBC / J.P. Morgan (DM/B&D) / Lloyds / Morgan Stanley / NatWest / UBS
- Timing: TOE 12:18BST. FTT immediately
From market source and MNI colour
US TSY FUTURES: BLOCK: Dec'25 10Y Buy
- +5,200 TYZ5 112-04, buy through 112-03.5 post time offer at 0659:37ET, DV01 $340,000.
- The 10Y contract trades 112-04 last (-12).
