REFILE-Russian Eurobonds in demand as high yields overshadow economic risk

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* Demand outsrips supply

* Russian Eurobond issues seen at up to $16 bln in 2020 -investor

By Anna Rzhevkina and Elena Fabrichnaya

GDANSK/MOSCOW, Feb 11 (Reuters) - Demand for Russian corporate Eurobonds this year has outstripped supply more than three times over as meaty yields overshadow risk of an economic slowdown from the knock-on effects of the coronavirus outbreak in China, analysts say.

Russia's central bank cut its benchmark interest rate to 6% last week, but that remains well above the near-zero rates in western markets and gives investors decent returns on domestic assets.

This helped Russian corporate Eurobond issues reach a total equivalent to nearly $13 billion last year. So far this year, domestic companies and banks have tapped western markets for a further $2.4 billion.

The outbreak of the new flu-like virus in China, which has claimed more than 1,000 lives and raised investor concerns over economic growth prospects around the world, has yet to have any negative impact on Eurobond issues.

"Despite increased volatility ... and a more cautious investor attitude to risk, we have not yet seen any significant changes in the primary debt capital market," Dmitry Gladkov, acting global head of investment banking at Renaissance Capital, told Reuters.

RenCap helped to arrange three out of Russia's six Eurobond issues so far this year, including a $300 million deal for Sovcombank, one of Russia's leading private banks, and a $500 million issue for fertiliser producer Phosagro.

RenCap was also among arrangers for a $500 million deal for pipemaker TMK. Like other issues, this attracted strong non-Russian participation, with two thirds of TMK's seven-year paper bought by foreigners.

Demand for all three was close to $2 billion, with Sovcombank offering a yield of 7.75% while Phosagro and TMK lured investors with yields of 3.05% and 4.3% respectively.

Emerging markets telecoms operator VEON, Russian private lender Credit Bank of Moscow and peer Alfabank also tapped the market, with yields ranging from 4% to 6.75%.

As top companies face $25 billion in external debt payments by June, banks and other businesses are likely to need to tap the market for refinancing, said Sergey Dergachev, emerging market debt manager at Germany-based Union Investment.

Gas monopoly Gazprom has already approved Eurobond issues for up to 6 billion euros ($6.6 billion) this year.

Together with the finance ministry, total Eurobond issues from Russia could reach between $12 billion and $16 billion this year, Dergachev said. Sovereign issue, usually capped at up to $3 billion, is expected before April, said a source familiar with the finance ministry's plans.

There were no major new western sanctions on Russia last year and investors have started to re-price geopolitical risk, said analysts at VTB Capital. ($1 = 0.9163 euros) (Reporting by Anna Rzhevkina and Elena Fabrichnaya Editing by David Goodman)