Banks Pouring Money Into Russian Loans

Forget default: country now looks like haven from credit turmoil
By Kevin Spak,  Newser Staff
Posted Sep 12, 2007 6:37 AM CDT
A logo of the Russian Transneft oil transporting joint stock...   (Getty Images)
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(Newser) – Banks around the world are clamoring to loan money to Russia, just nine years after the country paralyzed the economic world by defaulting on $40 billion in debt. These days, Russia looks like a haven from the US mortgage meltdown. Russian corporations borrowed $29 billion over the last three months, Bloomberg reports, up 40% from last year.

Since 2004, corporate loans from Russia have doubled to $256 billion. Benefiting from rising oil, natural gas and metal prices, Russia’s economy looks like a safe borrower. US companies, meanwhile, are finding borrowing increasingly hard. US Steel has seen its spread double since June, while Tyco Electronics recently became one of 50 companies abandoning deals that investors wouldn’t back.