JPMorgan Chase Co. and Bank of America Corp. are among several banks that have offered to facilitate transactions in corporate and sovereign debt on behalf of clients, according to people familiar with the matter who asked not to be identified.
Banks are willing to broker transactions after the Treasury Department said it was not a violation of US sanctions for individuals to wind down their positions, adding clarity on an issue that has confused many people in the market. The trades are for those who want to exit Russian debt holdings, according to a note sent by the Bank of America to investors last week.
In the aftermath of the Ukraine invasion and stiff US sanctions, many banks withdrew from Russia and stopped dealing in the nation's assets. Some investors were stuck with deeply distressed positions because of that. Some were unable to find a broker as recently as last month.
The topic has been so contentious that many brokers refused to sell their positions under the US sanctions rules, according to lawyers. Given the guidance from the Office for Foreign Assets Control, there is more confidence in the market about the ways that banks can deal in Russian assets without breaking the rules.
According to Bloomberg last week, Barclays Plc and Jefferies Financial Group Inc. are also offering bids to investors. On Monday, Reuters reported that Citigroup, Bank of America and JPMorgan were active in the market.
Representatives for Citigroup, Bank of America and JPMorgan didn't want to make a statement.
A license was granted last month by OFAC authorizing transactions needed to exit a position in Russian debt or equity. A license that expired on October 20 gave approval to purchase securities if it is part of the disposal process.
Russian debt prices have rebounded in recent weeks due to increasing trading and locals looking for assets to buy with money coming in from energy exports. The 10 year government bond is trading at 39 cents on the euro, up from the lows of 16 cents at the end of June when banks had stepped back from trading.
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