Gazprom, the world’s largest gas producer, on Wednesday raised SFr500m ($504m) in the first international bond sale by a Russian issuer this year.

The bond sale by the state-controlled gas company comes amid doubts over the Russian government’s plans to tap the international bond markets for the first time since the imposition of western sanctions over Ukraine, as both the US and EU have warned banks against participating in the deal.

Gazprom on Wednesday priced the Swiss franc-denominated bonds due November 2018 at 3.375 per cent, according to Dmitry Gladkov at Renaissance Capital, senior co-manager of the deal. Deutsche Bank, Gazprombank and UBS were joint lead managers.

Mr Gladkov said that investor demand had been strong, with an order book of around SFr2bn. “This is one of the few opportunities this year to get Russian quasi sovereign exposure while the timing of the sovereign deal remains unclear,” he said.

Gazprom is not subject to western sanctions, although its subsidiaries Gazprombank and Gazprom Neft are. “In two days of investor meetings, the question of sanctions hardly came up,” one person familiar with the deal said.

The warnings from the US and EU about the prospective Russian sovereign bond issue are focused on concerns that the proceeds could be used to fund companies under sanctions, such as struggling state development bank Vnesheconombank.

The Gazprom bond comes after the company earlier this month agreed to borrow €2bn from Bank of China in its largest ever bilateral loan.

The company said it anticipates its export price will fall to $199 per thousand cubic metres this year, the lowest since 2006. Nonetheless, it has said it plans to fund its hefty capital expenditure plans from cash flows – an ambition that has drawn scepticism from analysts.

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