Big debt plans are afoot in City Hall.

The city of Moscow, which Tuesday announced plans to borrow 300 million euros ($271 million) on international financial markets next month, is cautiously testing the waters in hopes that the loan will go ahead despite the chaos churned up by the terrorist attacks in the United States this week, City Hall said Thursday.

And, if the markets allow, Moscow is eager to borrow about $450 million more -- making a total of $735 million, or the amount that the city has to pay off this year.

Under the new budget code, a sub-sovereign borrower may only borrow as much as it needs to refinance its debt.

Moscow has already drastically whittled down that debt, which consisted mostly of two Eurobond issues. Now, there's only $100 million outstanding -- the remainder of a $300 million debt to Credit Suisse First Boston.

Mikhail Kalinushkin, head of the Moscow Financial Agency, which handles city debt, said Moscow has enough money in its coffers to pay off the $100 million without additional borrowing.

"Currently we are studying the market reaction," Kalinushkin said. "It's too early to decide. We have to determine whether investors are ready to lend to us and what the cost of the borrowing would be."

"Hard currency borrowing on the domestic market is an option as well," Kalinushkin said.

Currently, Moscow, along with the only other borrower that has access to international markets, St. Petersburg, has relatively low B credit ratings from Standard & Poor's and comparable ratings from Moody's.

"Moscow's main task here is not to let the amount of foreign debt fall," said Felix Eigel, an analyst with the rating agency EA Ratings, a Moscow affiliate of Standard & Poor's.

Moscow needs to borrow the money to invest in municipal projects it was forced to scrimp on to cope with this year's payments, analysts said. The city needs long-term, foreign investment, even though its recent domestic bond issues have met sufficient demand. Eigel said Moscow's projects require longer-term loans than those that can now be obtained on the domestic market.

Moscow's chances to borrow may not be grim despite the hostile environment left by the terrorist attacks. ING Barings warned this week that the damage done by the attacks on the United States may have a lasting negative effect on emerging markets -- but Russia is in a better position than most of the markets.

"We expect risk spreads to widen to reflect flight-to-quality considerations and decreased generic risk appetite," ING Barings said. "As a minimum, therefore, the cost of accessing markets should go up."

According to ING, South Korea, Turkey and Brazil have to come up with several billion dollars each to pay creditors in the next two years. Russia has a $1 billion Eurobond maturing in November, "but the government has long made it clear that this bond will be paid down, not refinanced," ING said.

Thus, Russia appears to be in a better position than most other emerging markets, ING economist Philip Poole said by telephone from London.

"This applies to sovereign just as it applies to subsovereign," he said. "Subsovereign borrowings are very much determined by sovereign borrowings."