Sanctions on Russia show bright side as corporates push to cut debt

London

SANCTIONS against Russia aren't all bad news for the nation's companies.

As the European Union (EU) extends penalties that are locking Russia out of global debt markets, corporate borrowers will be forced to reduce debt burdens that soared to the highest in at least a decade in 2014. Eurobond issuance from the nation's companies dwindled to just US$77 million this year from US$28 billion in the same period in 2013, according to data compiled by Bloomberg.

"Some corporates and banks used external debt capital markets too much without any internal limits," Egor Fedorov, an analyst at ING Groep NV in Moscow, said last Friday. "Sanctions implementation was a good kick for them to re-think their funding strategy and dep…