Russia is forced to fight against time again to avoid the default the United States is trying to push it towards. Yesterday the deadlines for the payment of approximately $ 100 million in interest on two Eurobonds, one denominated in dollars and one in euros, expiring in 2026 and 2036, expired. The National Settlement Depository of Moscow, the body that intervenes in the regulation of payments, he said he had received the funding from Moscow and the debit of interest on his account. But the non-renewal of the exemption granted by the US to its banks and its investors to process and receive Russian payments raises many doubts about the possibility that the money can reach the current accounts of the bondholders. Last night the Russian Finance Minister, Anton Siluanov reiterated that Moscow is working to develop a mechanism that allows it to pay in rubles, which can then be converted into the bond settlement currency.
A problem, he stressed, does not arise for Eurobonds denominated in euros, since the EU has not adopted restrictions similar to those implemented by the US Office of Foreign Assets Control (Ofac). Coupons expired Moscow has a grace period of 30 days to pay and avoid its first default since the Bolshevik revolution, a defeat in terms of image and a problem for the future refinancing of the debt. Russia, which could contest the default in light of its clear willingness to pay, has around $ 20 billion worth of foreign currency bonds in circulation on which it has to pay $ 1 billion in interest this year alone.
“Usually the default on sovereign debt is related to the inability of a government to pay due to a lack of available funds. In this case Russia is able and willing to pay but despite this it could be declared in default due to the inability for investors to receive payments or for banks to process them, “Darshak Dholakia, partner of the law firm Dechert, told Bloomberg.
“We will continue to pay the debt, in rubles if necessary,” and Russia will do everything to prove itself “a reliable debtor even in these conditions” in the eyes of investors, said Siluanov, according to which “Western countries” are “doing it. default on themselves “and” this doesn’t make sense “. Meanwhile, credit default swaps, bond insurance, continue to show bad weather in Moscow, with a probability of default of 87% within one year.
Source: Ansa
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