The price of some jumped as trading activity resumed.
Several large American Wall Street banks in recent days began trading Russian debt, giving investors another chance to get rid of assets that are widely considered toxic in the West, Reuters writes with reference to financial transaction data.
According to an investor who owns Russian securities, and two bank sources, most US and European banks withdrew from the market in June after the US Treasury Department barred US investors from buying any Russian securities as part of economic sanctions to punish Moscow for its invasion of Ukraine.
In July, the US Treasury allowed companies to sell Russian bonds, after which Wall Street's biggest companies cautiously returned to the Russian government and corporate bond market. Six banks, including JPMorgan Chase & Co ( JPM.N ), Bank of America Corp ( BAC.N ), Citigroup Inc ( CN ), Deutsche Bank AG ( DBKGn .DE) , Barclays Plc (BARC.L) and Jefferies Financial Group Inc (JEF.N).
Bank of America, Barclays, Citi and JPMorgan declined to comment. A Jefferies spokesman said the company is “working within global sanctions guidelines to facilitate our clients' needs to navigate this difficult situation.”
A source close to Deutsche Bank said the bank is trading bonds for clients only upon request and on a case-by-case basis to further reduce exposure to Russia or its clients outside the US, but will not engage in new transactions.
In May, two U.S. lawmakers asked JPMorgan and Goldman Sachs Group Inc ( GS.N ) to provide information about trading in Russian debt, saying it could undermine sanctions. The following month, the U.S. Treasury Department's Office of Foreign Assets Control banned U.S. money managers from buying any Russian debt or equity in secondary markets, prompting banks to halt trading.
On July 22, the Treasury Department issued further guidance to help settle default insurance payments on Russian bonds. It also specifies that banks could facilitate the clearing and settlement of Russian securities transactions if this helps American holders to wind down their positions.
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In addition, European regulators have also relaxed rules to allow investors deal with Russian assets. The price of some Russian bonds jumped with the resumption of trading activity since the end of July. That could make the deals more attractive to investors, as well as help companies that sold protection against a Russian default.
