UPDATE 3-Barclays chops Russia from bond index, crimping its market access

Вторник, 24 февраля 2015 18:40 MSK

* Barclays move prompted by Moody's downgrade

* Move will stop many funds buying or holding Russian bonds

* Latest blow to affect Russia's access to markets

* No comment from JP Morgan on whether it will follow suit (Adds investor comment, more background)

By Chris Vellacott and John Geddie

LONDON, Feb 24 (Reuters) - Barclays will remove Russian foreign currency debt from its global bond indexes, putting it off-limits for many international investors, after Moody's became the second agency to downgrade the country's credit rating to junk.

The move adds to a list of financial headaches for Russia, already hit by currency weakness and a looming recession as it absorbs the double blow of Western sanctions over Ukraine and a halving of world oil prices since last June.

When bonds are excluded from an index, conservative tracker funds are no longer able to buy or hold them, something that can lead to heavy selling and will make it harder for Russia to raise money on international capital markets.

"The downgrade does signal more limited access and higher costs for hard currency borrowings," said Peter Marber, Boston-based head of emerging markets investments at fund manager Loomis Sayles, who added his team were "active traders" in the market for Russian bonds and would not be forced to sell because of the Barclays move.   Продолжение...