The Ministry of Finance denied the onset of default in Russia

Moscow. 27th of June. INTERFAX.RU – Investors did not receive payments on two issues of sovereign Eurobonds of the Russian Federation due to the actions of third parties, which is not directly provided for in the issuance documentation as a default event, the Russian Finance Ministry

On Monday, the 30-day grace period expired, during which the Russian Federation had to resolve the issue of paying coupon payments on the Russia-2026 and Russia-2036 issues.

Payments on these issues of Eurobonds fell on May 27. But on May 25, the OFAC license, which allowed the transactions necessary to receive payments on Russian securities, expired, and the US Treasury announced in advance that it would not renew it .

On May 20, a week before the expected payment date, the Russian Ministry of Finance transferred funds to the paying agent for these issues – NSD – and announced that it had fulfilled its obligations to service debt securities in accordance with the issue documentation. NSD, acting as a paying agent, reported that the Eurobond payments received by the depository were transferred to depositors. However, these funds „stuck” in the international depository Euroclear and never reached the holders.

Michael Cooper

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