US banks unlikely to pursue Russian bond deal
Major US banks refused to take placements of Russian securities due to pressure from the U.S. government.
Wall Street Journal sources reported that Goldman Sachs was closest to placement, having applied for participation in placement of Russian sovereign securities. However, the application was structured in such a way as to allow the bank to withdraw its investment at any time.
Goldman Sachs decided to pursue this option in spite of warnings from the U.S. government. Sources also say that J.P. Morgan Chase considered filing their application for participation in placement but management eventually decided not to follow through. Bank of America Corp., Citygroup Inc., Morgan Stanley and Wells Fargo & Co. refused right from the start.
Earlier, an RBC source reported that Goldman Sachs initiated their application before U.S. authorities began convincing banks not to participate in the placement of Russian securities. Goldman Sachs has now reversed its position and is seeking ways to withdraw the application. An employee of the State Bank confirmed this information, noting that other banks who filed have also found themselves in a similar situation.