U.S. warns banks off Russian bonds

The U.S. government has warned some top U.S. banks not to bid on a potentially lucrative but politically risky Russian bond deal, saying it would undermine international sanctions on Moscow, people familiar with the matter said, Report informs referring to The Wall Street Journal.

The move, apparently the first of its kind since the sanctions went into effect, has sent Wall Street bankers scrambling to determine whether the opportunity for new business is worth the political downside of bucking the administration's warning. The rules don't explicitly prohibit banks from pursuing the business, but U.S. State Department officials hold the view that helping finance Russia would run counter to American foreign policy.

Russia plans to issue at least $3 billion of foreign bonds - its first international issue since the U.S. and its allies imposed sanctions in 2014 following Moscow's annexation of Crimea and support for separatists in Ukraine, according to people familiar with the matter.

So far, there is no consensus among the Wall Street firms about whether to move ahead. Some bank officials, including at Citigroup, say they won't participate. Other banks, including Goldman and J.P. Morgan, continue to weigh their options.

Officials at the State Department and Treasury Department issued the caution in response to questions from some of the banks about whether they were permitted to arrange a bond sale for Russia.

U.S. government officials say helping Russia finance its debt would run counter to the objectives of the sanctions.