* Magnit raises $527 million in SPO, LUKOIL $1.5 bln
* Polymetal, Megafon seen next
* Trust in Russian firms revived, still tough for RUSAL
(Updates with LUKOIL pricing)
By Dmitry Zhdannikov
MOSCOW, Oct 29 (Reuters) - Russian firms have raised over $2 billion from debt and capital markets this week and more borrowers are poised to follow suit shortly if current risk aversion proves to be short lived.
After a period of panic selling at the end of 2008 and early 2009, investors have regained their appetite for Russia as oil prices rose to annual peaks, the rouble strengthened and government officials and bankers said the worst was over.
Russia borrowed less than any other BRIC nation this year and is the only one in the group -- which includes Brazil, India and China -- with lower syndication levels than in 2008.
This was because "the Russian economy had been falling while (those of) other BRIC nations continue to rise," said Denis Poryvai from Uralsib.
"The picture is different now as oil prices are strong, the economy is showing some signs of recovery and problems with credit refinancing are being solved domestically. We therefore expect a recovery in trust toward Russian companies," he added.
On Thursday, grocery chain Magnit raised $527 million in a heavily oversubscribed secondary share issue while oil major LUKOIL is placing a $1.5 billion Eurobond.
Magnit's issue became the largest Russian share placement since the crisis and only the second to take place after steel maker Evraz. The Krasnodar-based retailer will use the proceeds to expand its hypermarket chain.
Magnit priced its SPO at the top end of the price range to meet healthy demand from foreign investors, who chose to ignore a 3-day correction in emerging markets.
LUKOIL's placement, however, has taken longer than expected to be priced but was in the end helped by better-than-expected U.S. economic data. It is Russia's first benchmark bond by a privately-held firm since the crisis.
"LUKOIL's bond placement could prove an important milestone in overcoming the effects of the crisis for Russian companies," analysts from Unicredit said in a research note.
IPO EXIT
Russia's government plans to issue $18 billion worth of Eurobonds next year, but its sovereign rating will not be affected because its debt ratios will remain comparatively low, Moody's lead analyst for the country told Reuters on Thursday.
"The Russian government has very little debt. Even with this extensive increase in borrowing, Russia still seems OK," Jonathan Schiffer told Reuters financial television.
Russian firms and banks borrowed fiercely before the crisis to fuel growth and entered the financial storm with over $400 billion in foreign debts, prompting the government to save them from defaults and propose measure to cap borrowings.
Now the macro-economic environment is improving, with no measures to cap borrowing yet in place, the number of firms with bond and share placement plans is growing again.
Russia's No 3 wireless firm MegaFon, which is considering acquisitions, said on Wednesday it will launch a $1.5 billion European Medium-Term Notes programme in December-February.
The country's top silver miner Polymetal may accelerate book building for a $300 million secondary placement of up to 10 percent of its shares.
"With investor sentiment appearing to improve and with a pent up supply of private equity portfolio companies considering an IPO exit, we continue to believe that there will be a substantial pick-up in IPO activity in the first half of 2010," PwC said in its European IPO watch report this week.
Strong silver and gold prices will support Polymetal's placement just as oil is helping LUKOIL.
But bankers say even a solid recovery in aluminium prices might not be enough to persuade investors to sign up for shares of aluminium giant RUSAL, co-owned by Oleg Deripaska -- once Russia's richest man and now its most indebted tycoon.
The firm has to reach agreement with its foreign creditors on $7.3 billion of debt by mid November if its IPO is to proceed this year, bankers said on Wednesday. (Reporting by Dmitry Zhdannikov, + 7 495 775 12 42; Editing by David Cowell)