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SpreadMonitor Russia - 2Q 2004
The second quarter of 2004 was characterized by volatility and lack of liquidity in the domestic and internationa l financial
markets for Russian borrowers . The inter-bank market contracted as several banks had their licenses revoked. On the
Russian federal bond market (OFZ), volatility continued to rise, while yields trended higher (the reference OFZ basket yield
rose by 157 basis points (bp) to 5.7%). Due to second-quarter changes in the reference basket, published spreads are not
directly comparable to previous data. Changes were made due to the maturity of the SU27013RMFS0 issue. Eurobond
spreads widened almost across the board for Russian issuers, with only a few issuers seeing their reported spreads tighten
(see table on page 10). Under current turbulent and illiquid market conditions, spread indications are driven by many factors
in addition to changes in credit quality and should be interpreted with particular caution.