Russia took a 180-degree turn to avoid default, making a series of late interest payments in dollars on its overseas bonds, despite previously promising to pay only in rubles while its reserves remained frozen.
Russia’s $40bn of international bonds have become the center of a nervous game following sweeping Western sanctions, and speculation of a default is likely to reignite in less than four weeks, when the US license that It allows Moscow make payments.
The Russian Ministry of Finance It said it had managed to pay $564.8 million in interest on a 2022 eurobond and $84.4 million on another 2042 dollar bond.
A senior US official confirmed that Moscow had made the payment without using frozen reserves in USAadding that the exact source of the funds was unclear.
“We do not authorize any transaction with the funds tied up in the United States,” the official said.
Russia said it had channeled the required funds to the London branch of the Citibankone of the “paying agents” whose job it is to disburse them to bondholders.
Citibank declined to comment.
“Payments were made in the currency of issuance of the corresponding eurobonds: in US dollars,” the Russian Finance Ministry said. “In this way, the servicing obligations of sovereign Eurobonds are met.”
Two bondholders said they had not yet received the funds, but the process can take days.
“I don’t see a reason why they (the paying agent) can’t make that payment,” said Kaan Nazli, a portfolio manager in the Emerging Markets Debt team at Neuberger Berman, which owns Russian sovereign bonds.
the russian bank Sberbank He said in turn that he had paid the coupons of two subordinated eurobond issues in rubles because the sanctions of the United States and Great Britain prevented him from making payments to investors in accordance with his initial commitments.
Russia has not had a default of any kind since the 1998 financial crash and has not seen a international default or “external” since the aftermath of the Bolshevik revolution of 1917.
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