Rating agency Moody’s will consider Russia to be in default if Moscow doesn’t make payments on its sovereign bonds in USD by May 4, Bloomberg reported on April 14. On April 4, Russia made bond payments in Rubles, violating its obligations, starting the clock on the 30-day grace period to correct the breach of contract.
At the same time, the agency said that this doesn’t change Russia’s current Ca (negative outlook) credit rating.
The decision of the government in Moscow to make payments on two of its outstanding Eurobond issues (due in 2022 and 2042) in Rubles constitutes an alteration of the initial contracts. According to Moody’s that “would be considered a default,” unless proper payments in USD are made by May 4.
Earlier, Bloomberg described a Russian sovereign debt default as “inevitable” – first such event in more than a hundred years.
In early April, U.S. Treasury blocked Russia from making debt payments using the funds that remain frozen in Western financial institutions.