Russia announced it was able to pay interest on Eurobonds in dollars

17 March, 08:54 PM
Russian Federation declared that it paid on Eurobonds in dollars (Photo:NBU Press Center)

Russian Federation declared that it paid on Eurobonds in dollars (Photo:NBU Press Center)

The Ministry of Finance of the Russian Federation announced the payment, in U.S. dollars, of coupon income on two Eurobond issues in the amount of $117 million maturing in 2023 and 2043, according to business news outlet Bloomberg on March 17.

The Ministry promised to comment later on whether the payment was credited to Citibank in London, the paying agent for Russian Eurobonds.

In case of non-payment of a coupon or payment in rubles, Russia could face the first default on its foreign obligations since 1918, when Bolsheviks refused to service the debts of the Russian Empire.

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As Alexander Kudrin, chief strategist of Russian investment group ATON, commented to the Russian media outlet The Bell, the money is most likely still on the way from the correspondent bank to the paying agent, which has not credited the money yet.

For now, the payment agent most likely conducts a compliance check to see if they can accept this payment.

According to Kudrin, it follows from general logic that the money for the payment of coupon income on sovereign bonds was taken from the frozen accounts of the Ministry of Finance and/ or the Central Bank, access to which has been limited due to sanctions over Russia’s invasion of Ukraine.

Earlier, the Fitch rating agency stated that it would consider Russia's coupon payments in rubles as a default.

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