It takes more than sanctions to scare California's police and firefighters from investing in Russia. The US state is reported to be a top 10 holder of Russia’s state-issued bonds.
The California Public Employees’ Retirement System, or Calpers, had about $460 million invested in Russian OFZ bonds as of the end of June, Bloomberg reports.
Other US investors like BlackRock and Stone Harbor Investment Partners remain among the top 10 holders of Russian bonds, according to the media. BlackRock is the largest foreign holder of Russian OFZs with $2.53 billion invested.
Washington has threatened to impose sanctions on Russian bond issuance as senators Lindsey Graham and Robert Menendez are sponsoring the legislation dubbed the “bill from hell”. Analysts have said that huge investments by US pension funds is a sign that they oppose rhetoric from the White House.
“It matters that pension funds are involved in Russian debt because they’re likely arguing against sanctions against sovereign bonds” to the Treasury’s Office of Foreign Assets Control, Koon Chow, a senior strategist in London at Union Bancaire Privee, told Bloomberg.
“It may not have much impact though, given the bipartisan US support for punishing Russia further,” he added.
Investing in Russian bonds has been lucrative in the last years. The central bank of Russia is offering a yield from 7 to 9 percent depending on the maturity of the bonds. For example, the US Treasury bonds are offering a maximum of 3.35 percent with a 30 year maturity.
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