The investment service of the Moody’s agency confirmed last week that Russia would be considered in default if it does not pay two maturities in dollars before the grace period ends on May 4.
Moody’s specified that the April 4 payment of two bonds maturing in 2022 and 2042, in rubles instead of dollars, “changes the payment terms of the original contracts and, therefore, can be considered a default” if Moscow does not pay this debt before May 4.
“The bond contracts do not provide for any reimbursement in a currency other than the dollar,” adds Moody’s.
“Although Eurobonds issued after 2018 allow, under certain conditions, redemptions in rubles, those issued before 2018 (including 2022 and 2042 bonds) do not contain this alternative currency clause or only allow redemption in other hard currencies ( dollar, euro, pound sterling or Swiss franc) ”, details the agency.
On April 9, the rating agency S&P Global Ratings announced the downgrading of Russia’s rating for its payments in foreign currency to the level of “selective default”, precisely because Moscow settled the debt mentioned by Moody’s in rubles.
At the beginning of April, the Russian Ministry of Finance announced the liquidation in rubles of a debt of almost 650 million dollars.