A Russian oil company effectively barred from international capital markets by western sanctions has found an ingenious workaround. It involves a Moscow bank taking a detour to Dublin.
In February, Credit Bank of Moscow PJSC used an Irish shell company to sell $500 million of bonds to investors including Goldman Sachs Group Inc.While the marketing materials for the offering didn’t dwell on the bank’s relationship with Rosneft PJSC, the state-controlled oil company has drawn the lender into close orbit, making hundreds of millions of dollars in deposits at a time of financial duress and borrowing billions in return.
The Moscow bank isn’t sanctioned and doesn’t face any limits on raising funds from international investors. The money it brought in through the Irish special purpose vehicle, or SPV, didn’t go directly to Rosneft. Yet the maneuvering allowed the bank to expand its lending to the oil company, highlighting one way Russian firms are circumventing U.S. and European restrictions.
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